Switching from FHA to conventional

[Metroappr]

Thanks-the client has ordered an appraisal update (change loan type) with a smaller fee. This suffices everyone. I will go take photos again (did the report 2 weeks ago).

Side note. The original report was for an FHA purchase pre market listing. I came in substantially higher in value than purchase offer. The new equity changes loan type i guess.

 

[J Grant]

Thanks-the client has ordered an appraisal update (change loan type) with a smaller fee. This suffices everyone. I will go take photos again (did the report 2 weeks ago).

Side note. The original report was for an FHA purchase pre market listing. I came in substantially higher in value than purchase offer. The new equity changes loan type i guess.

I have no idea what this means - change loan type? It was a purchase - what is it now, an equity loan?
An appraisal update is only for the original appraisal.
And this is confusing - the original report was for an FHA purchase pre-market listing - who was the client? How is a pre market listing done for FHA?

 

[Metroappr]

I have no idea what this means - change loan type? It was a purchase - what is it now, an equity loan?
An appraisal update is only for the original appraisal.
And this is confusing - the original report was for an FHA purchase pre-market listing - who was the client? How is a pre market listing done for FHA?

You're not really supposed to understand everything. It is quite simple. The borrower bought a house on a FHA loan. The home was sold to her off market-before listed. I valued the home higher than the purchase offer. The borrower now qualifies for a conventional loan after the appraisal came back (my guess). The lender requested that I change the report to reflect a conventional from a FHA. This requires me to go back out to the house to take photos. I told the lender to order an appraisal update, so the borrower isn't charged full fee because all I am really doing is retaking photos. A win win.

 

[JTip]

the client has ordered an appraisal update

A 1004D?

Well that's wrong.

 

[J Grant]

You're not really supposed to understand everything. It is quite simple. The borrower bought a house on a FHA loan. The home was sold to her off market-before listed. I valued the home higher than the purchase offer. The borrower now qualifies for a conventional loan after the appraisal came back (my guess). The lender requested that I change the report to reflect a conventional from a FHA. This requires me to go back out to the house to take photos. I told the lender to order an appraisal update, so the borrower isn't charged full fee because all I am really doing is retaking photos. A win win.

Wow, what I do understand puts you in the crosshairs of a state board. Why risk your license because you care about the borrower being charged a full fee? Go ahead and do what you want.

 

[Zoe]

Wow, what I do understand puts you in the crosshairs of a state board. Why risk your license because you care about the borrower being charged a full fee? Go ahead and do what you want.

Even if they decide not to charge the same fee as the original, they still need to do a new assignment. New effective date maybe, etc. Keep it clean in case it goes to a state board. Yes, I did this assignment for FHA. I did this assignment for conventional. Both 1004's or whatever the original appraisal report was for FHA. You have two different intended use and users. Even if both are intended for the purchase, you still have two different intended users. Disclose the previous assignment in the new assignment report.

 

[Zoe]

you didn't change it from FHA to conventional. Not your problem. Don't let lender make their problem your problem. New assignment keeps you clean.

I won't swear FHA would not give permission to switch it to another lender if the borrower wanted to change lenders, but switching from FHA to conventional is a new assignment. FHA can switch it and you not change a thing in the original appraisal report. FHA is still your client. They have more power than you.

 

[sputnam]

Thread '2024 USPAP - "Personal Inspection" definition revised'

Dec 27, 2023

Working RE: "Finally, the inspection must be performed as part of the scope of work for the assignment. For example, if an appraiser had made a personal inspection of a property six months ago and is subsequently engaged to perform a new appraisal on the property, the appraiser cannot certify that they made a personal inspection of the property unless they inspected it again as part of the scope of work for the new assignment."

Curiosity has me wondering about several particular past cases and how they would be handled with the new definition, if indeed it changed the way the...

• Ricky LaFleur
• Replies: 66
• Forum: Fannie Mae, Freddie Mac, USPAP

Right... but it's the same assignment. The subject property, effective date of the appraisal, and the scope of work have not changed. If it were a conventional to FHA conversion... instead of the other way... it might require reinspection of the property... since many conventional appraiser do not routinely test outlets, etc as required by FHA.

As a business decision, you might want the Client to submit a new order. What you charge for the service is 100% between you and the Client... but, unless the Client or effective date is to change, it does not require that you start over.

 

[Zoe]

Right... but it's the same assignment. The subject property, effective date of the appraisal, and the scope of work have not changed. If it were a conventional to FHA conversion... instead of the other way... it might require reinspection of the property... since many conventional appraiser do not routinely test outlets, etc as required by FHA.

As a business decision, you might want the Client to submit a new order. What you charge for the service is 100% between you and the Client... but, unless the Client or effective date is to change, it does not require that you start over.

yeah. I thought about that. Effective date would not necessarily need to be changed. None the less, it is a new assignment whether switched from FHA to conventional or conventional to FHA. Reason being is because intended user has changed. Just changing the name on the report won't work and keep it clean. Previous assignment would need to be disclosed in the new assignment.

If it were me, I would contact FHA and let them know what I was doing and make sure they were okay with it. Your client and liability are shifting. New assignment.

Your client's liability is shifting also. New assignment.

 

[Zoe]

You do kinda have the lender by the balls if FHA agrees. What will they pay for new assignment somewhere else? If they shift appraiser, your liability is gone on your original assignment. Not totally, but much of your liability is gone. Client, intended use and user.

The client obviously wants something for nothing. cough..........cough...........