Urban comp - over 1 mile?

[Stephen J. Vertin MAI]

Hot off the press:

HUD Preps a Couple of Regs
The Department of Housing and Urban Development (HUD) has announced
information on two upcoming proposed rules that will have a significant
impact on appraisers on the FHA Appraiser Roster.
* One rule due out shortly would create an "FHA Appraiser
Watch Initiative." HUD states the Initiative will establish and monitor a
performance standard that appraisers must meet to maintain their status on
the FHA Appraiser Roster. Currently, HUD is considering an approach
modeled on FHA Credit Watch Termination Initiative that would provide for
an electronic, fully computerized Appraiser Watch monitoring system, and
would permit an appraiser to be removed from the Roster if the rate of
defaults and claims on closed mortgages linked to the appraiser exceeds a
rate established by HUD.
* The second rule would clarify lender accountability for
appraisals and strengthen HUD's regulations concerning the responsibilities
of lenders in assuring the quality of FHA appraisals. First, the rule
would codify HUD's policy that lenders are responsible, equally with
appraisers, for the quality of appraisals on properties that secure FHA
insured mortgages. Further, the rule would clarify that lenders are
subject to sanction by the HUD Mortgagee Review Board for submitted
appraisals that are inconsistent with FHA requirements. HUD believes these
proposed changes will help ensure that homebuyers receive an accurate
statement of value. These changes, HUD says, also will ensure that an
accurate appraised value is received for calculating the maximum mortgage
amount that can be insured, which will in turn better protect the FHA
mortgage insurance funds.

HUD announced the upcoming proposed rules in a notice in the Federal
Register (Vol. 67, No. 92) on May 13, 2002. The notice can be accessed at
<http://www.gpo.gov/su_docs/aces/aces140.html>.

 

[The Bob]

... Currently, HUD is considering an approach modeled on FHA Credit Watch Termination Initiative that would provide for an electronic, fully computerized Appraiser Watch monitoring system, and would permit an appraiser to be removed from the Roster if the rate of defaults and claims on closed mortgages linked to the appraiser exceeds a rate established by HUD.

That's the most assinine idea I've ever heard of. What the hell do appraisers have to do with someones ability to pay. If this stands, they can take my name off the list.

 

[Ben Vukicevich SRA]

Steve,

HUD has their brain in their, well I can't say it here. They tried this appraiser claims and default stuff before and actually had a website where you could review the appraisers claims and default rate. Maybe they'll put up a claims and default rate for termite inspectors too. It would have the same meaning. The default I believe is 90 days late on a mortgage payment. The claim is an actual foreclosure. The appraisal is a tool in the underwriting process and to link it to defaults/claims is silly but it's HUD. They just don't want to bother with reviewing reports. That's how you stop fraud. Not after it occurs at the claim/default stage.

When there was mortgage fraud in Camden, NJ in the 1980's, the FHA chief appraiser jumped right on it and the blanket statement issued was that every appraisal in Camden would be reviewed by FHA. Who knows if they ever did it, but it stopped the fraud right away. That's what you need. Appraisers worried about FHA looking over their shoulder on every appraisal. If that was implemented, every FHA appraiser would be on an equal footing-no messing with values. No missing repairs. Big Brother is watching. No fancy system needed just an appropriate "leak" would do the trick. Aren't politicians good at leaking info??????

Regarding their other annoucement-that's typical FHA old hat stuff. The lender has always been responsible for the actions of the appraiser under direct endorsement underwriting. Just typical FHA lingo that they're doing something.

Hey, they don't really have to worry too much. They're making so much money, they lowered the insurance premiums awahile ago. FHA is like DMV. They contribute money to the general treasury.

Ben

 

[Ben Vukicevich SRA]

Ron,

Sounds like you're correct in your assumption. They shopped "value."

HUD would sure be interested in your info.

Good Luck

Ben

 

[Stephen J. Vertin MAI]

JimBob:

I did not write the post. It was from the AI e-News. Since it was directly related to the string pasted it in. I should have made that clearer when I posted it. I agree with you appraisers do not have anything to do with foreclosure.

Steve Vertin

 

[Francois K. Gregoire]

Steve,

HUD has their brain in their, well I can't say it here. They tried this appraiser claims and default stuff before and actually had a website where you could review the appraisers claims and default rate. Maybe they'll put up a claims and default rate for termite inspectors too. It would have the same meaning. The default I believe is 90 days late on a mortgage payment. The claim is an actual foreclosure. The appraisal is a tool in the underwriting process and to link it to defaults/claims is silly but it's HUD. They just don't want to bother with reviewing reports. That's how you stop fraud. Not after it occurs at the claim/default stage.

Ben

Hey Ben,

Remember THIS?

 

[Ben Vukicevich SRA]

OH GOD FRANK.

I NEVER USE CAPITAL LETTERS IN A POST AND I NEVER FORGET ANYTHING. OF COURSE I REMEMBER YOUR EFFORTS IN GETTING THE LINK REMOVED.

GRAB THIS. CLICK ON YOUR LINK. CLICK ON THE LINK IN THE ARTICLE. THE DAMN THING STILL COMES UP. YEP, IT WAS SUPPOSED TO BE GONE BUT THE LINK STILL WORKS. IT'S BACK...........AND DATED TO 6/7/2002 ALTHOUGH THE NUMBER OF APPRAISALS HASN'T INCREASED SINCE LAST TIME SO SOMETHING IS WRONG.

HEY, YOU'RE DOING BETTER THAN ME. I GOT A 9% DEFAULT RATE. YOU'RE 6%. WE BOTH HAVE 1 CLAIM.

BETTER GET BACK TO WORK..........AND GET RID OF IT FOR GOOD.

Ben

 

[Tim The Enchanter]

If Bensen buys a home that appraiser Smith says is worth $200,000 and Bensen later defaults, that does not mean the appraisal was wrong or that Smith did anything which was unfair, unprofessional, or illegal. Buyer Bensen, for example, may have defaulted because of a job loss or the need to pay costs associated with a major illness

Message to HUD,

DUH!

 

[Ron in AR]

So I called HUD. Gave 'em a quick run down.

They called back.

They want the case #, buyer's name, address and.... drum roll please.... the lenders name.

Yeehaw,

Ron in AR

 

[Ben Vukicevich SRA]

Lee,

Be nice now and stop spelling HUD backwards in big red letters. :lol: :lol: :lol:

Your post was exactly the appraisers basic argument with HUD. Frank G jumped on them and got them to take the link down but now I'm finding it still attached to the article and still working. You won't find Appraisers Default and Claims on the HUD website anywhere.

You are correct, the appraisal is a tool in the loan process and the DEU has the final call on loan approval. HUD's theory is that over-valuations and missed repairs lead to defaults and claims. Since I do mostly new construction FHA appraisals, there are no repairs to be concerned with so that shoots their theory down in one area.

It's nice to know I'm a better appraiser in PA and DE (lower default and claim rate) than I am in my home state of NJ. Oh well, so much for that USPAP geographical competency stuff.

Ben