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Reverse Mortgage Appraisals

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cridgely01

Thread Starter
Sophomore Member
Joined
Sep 6, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
This is a new subject for me. I have never been asked to an FHA reverse appraisal--just wondering if and when I do how are these handled, are there any differences and are there areas to be specially addressed? Caution areas to be aware of and any resources to use as guidelines..
 

Charles Decker

Sophomore Member
Joined
Nov 16, 2006
Professional Status
Certified Residential Appraiser
State
Arizona
I have a potential new client and they do alot of RM's. I told her I am not fimiliar with these so she showed me a RM appraisal. Did'nt look any different from any other FHA appraisal. The borrower also must attend a seminar in the early stage of the process and I "think" the FHA case number is not issued until the HO attends the class.
This client also offers a "seminar" twice a month telling folks how they work. I am attending her seminar on the 26th to learn more about RM's.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Its just like any FHA appraisal from the appraiser's standpoint.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Interesting because I just sent one off to one of my good clients about 15 minutes ago.

You handle them just as you would a normal FHA. I tend to include additional photos if necessary plus make lots of additional comments about condition, the market, etc. since these reports appear to be well scrutinized by the UW. One thing for this client, even though the subject is in a low density rural market, I make sure that the first 3 comps do not exceed 12 months due to the declining values. In addition, in this particular house, the subject was in a really great condition in a good demand sub with proximity to Lake Michigan and a connecting inland lake (non-waterfront) but only 1 sale of a similar size 1.5 story modular house on inferior lot with no basement. I just made sure that the physical attributes of the houses, the reason for dissimilar style comps and the distance to the majority of the comps (10 to 13 miles) was fully explained in the report.

I personally like doing FHA reverse mortgage appraisals, primarily for two reasons: #1) The houses are generally in really good conditions which makes the analysis easier and less problems explaining condition and deferred maintenance and #2) The HO's are older folks who have lived in the house for a significant period of time and are really nice to work with and visit with during the inspection. Thre has not been one grumpy HO in all of the reverse mortgage appraisals I have completed.
 
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CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Interesting because I just sent one off to one of my good clients about 15 minutes ago.

You handle them just as you would a normal FHA. I tend to include addition photos if necessary and make additional comments about condition, the market, etc. since these appear to be well scrutinized by the UW. One thing with this client, even in a low density rural market, I make sure that the first 3 comps do not exceed 12 months due to the declining values. In addition, in this one, the subject was in a great condition in a good demand sub with proximity to Lake Michigan and a connecting inland lake (non-waterfront) with only 1 sale of a similar size 1.5 story modular house on inferior lot with no basement. I just made sure that the physical attributes of the houses, the reason for dissimilar style comps and the distance to the majority of the comps (10 to 13 miles) was fully explained in the report.

I personally like doing FHA reverse mortgage appraisals, primarily for two reasons: #1) The houses are generally in really good conditions which makes the analysis easier and less problems explaining condition and deferred maintenance and #2) The HO's are older folks who have lived in the house for a significant period of time and are really nice to work with and visit with during the inspection. Thre has not been one grumpy HO in all of the reverse mortgage appraisals I have completed.

It must be opposite day here at the forum.
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
If you ever have the opportunity to review the settlement sheet for a reverse mortgage you will be amazed how expensive it is. The cost to fund these loans typically exceeds $10,000 and I have seen up and beyond $15,000.

I was recently speaking with a LO about these mortgages and he is closing one with an estimate commission to him for $60,000. The applicant is a high-end applicant with over 20 million dollars in properties and using the reverse mortgage to fund an insurance policy for death benefits to help pay the potential inheritance taxes in respect to his real estate holding.

To answer your question, the appraisal is the same within respect to the safety and the welfare of the applicant. Like other mortgage programs there are LTV issues when there is an existing mortgage. Here in MA they close a reverse mortgage with a first and then as a second mortgage for the same mortgage amount but as one mortgage. This adds to the recording costs.
 

Ion Caza

Sophomore Member
Joined
Oct 21, 2005
Professional Status
Certified Residential Appraiser
State
Michigan
It's a normal FHA appraisal.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Ditto to the two Dittos above, it's just anuther FHA appraisal. While we don't include the VC's, they are still our guide.
 

cridgely01

Thread Starter
Sophomore Member
Joined
Sep 6, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Thanks to all who responsed its appreciated..:beer:One less thing to be worry about...I think the class idea was a good one..This seems to be coming a popular loan program...Knowledge is wealth.
 
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