Where are the FHA Reviewers?

[Jungle Boy]

I've never filled in a VC sheet. Don't you think that puts me at a disadvantage?

It might, it might not. It depends on the appraiser that I am.

Do I try to do my job well? You betcha.

Do I account for every item that was in the VC sheets? I don't have a clue.

From what I understand, some of the items on the VC sheets don't apply anymore.

 

[Chris Colston]

I've never filled in a VC sheet. Don't you think that puts me at a disadvantage?

Do I account for every item that was in the VC sheets? I don't have a clue.

From what I understand, some of the items on the VC sheets don't apply anymore.

According to the reps at HUD, that I've spoken to, especially in that class I mentioned, the inspection part has not changed.

You still need to check a random sampling of electrical outlets, go head and shoulders into the attic and crawl spaces, check a random sampling of the windows especially in the bedrooms, flush the toilets with the water running to check the water pressure, check at least one burner on the range to make sure there is at least 1 working cooking surface, view the roof from the street, photo all sides of the house.

What you no longer have to mention is a flat roof or termites unless you can see the damage or know the roof is leaking.

The VC sheet is a great tool to make sure you've caught everything that still needs to be caught.

 

[Terrel L. Shields]

It might, it might not. It depends on the appraiser that I am.

Do I try to do my job well? You betcha.

Do I account for every item that was in the VC sheets? I don't have a clue.

From what I understand, some of the items on the VC sheets don't apply anymore.

Depends more than upon your appraisal skills. You have to understand their special little rules. That's what I mean. FHA used to have their own reviewers who knew it inside and out and rated you 1 - 5 on a report. Didn't take long to know what made them happy and what didnt'.

 

[Rufus]

The VC sheet is a great tool to make sure you've caught everything that still needs to be caught.

I concur. I keep blank VC sheets right next to my blank inspection form and grab one of each when doing FHA.

 

[OSU Beavers]

Our first home loan was an FHA. About two or three months later, Mrs Beavers told me that some guy came from Portland and asked to go thru the house for our FHA loan. I was freaking out since we had moved the woodstove out for the closing and back in after and thought they would take away our loan. So I called the reviewer who said that every thing was ok, only 1 in 10 FHA appraisals were field reviewed and he had come over to do six that day.

Years later I got a call from an appraisal firm in Denver looking to sub-contract FHA reviews to us from HUD. The work was described as being a full redo of the original report for less than half the fee. I told them MY fees and never heard back. I can only assume that all local FHA reviews are rubberstamped cut rate work.

 

[Greg Bell]

FHA has a 1 page review form.Reviews are done with contracts only , have fun..

 

[Restrain]

Before I left the fee world, I did FHA reviews. However, they weren't for FHA, but for the lender. Apparently FHA started letting the lenders do the QA reviews. Fox and the henhouse?

 

[JoeGermade]

I am kind of confused on what happens with these FHA deals. I spoke to the owner of a local bank about what goes on with his FHA deals. I was curiouse about this because I had never been sent back to homes after I called for such things as handrails, smoke detectors, peeling paint.....

He told me this is all at the under writers discretion. If they feel it is necessary they will call the loan on it. I asked "what if they dont read the addendum"? He said than oh well. The under writers job is not to review the appraisal but see if the borrower can actually pay the mortgage.

I asked "who reviews the appraisal". Well Joe, the under writer does... He explained that they look at the value and than run an AVM on the property. As long as the value falls with in the range of the AVM the appraisal is ok.

Basically what I learned is the UW oks the appraisal and once they close the deal they just sell it to an invester. They have almost no QC on the appraisal end. This company has sent me a few review assignments here and there and the appraisals are worthless. Repair items are visible in photos, not one comp with in 6 months in a declining urban market.

So when does FHA actually get to it?

 

[ghrousseau]

I am kind of confused on what happens with these FHA deals. I spoke to the owner of a local bank about what goes on with his FHA deals. I was curiouse about this because I had never been sent back to homes after I called for such things as handrails, smoke detectors, peeling paint.....

He told me this is all at the under writers discretion. If they feel it is necessary they will call the loan on it. I asked "what if they dont read the addendum"? He said than oh well. The under writers job is not to review the appraisal but see if the borrower can actually pay the mortgage.

I asked "who reviews the appraisal". Well Joe, the under writer does... He explained that they look at the value and than run an AVM on the property. As long as the value falls with in the range of the AVM the appraisal is ok.

Basically what I learned is the UW oks the appraisal and once they close the deal they just sell it to an investor. They have almost no QC on the appraisal end. This company has sent me a few review assignments here and there and the appraisals are worthless. Repair items are visible in photos, not one comp with in 6 months in a declining urban market.

So when does FHA actually get to it?

Not sure. I believe they use a algorithm to make the determination. I can give you a little insight based on the current work I do. I work for a lender and I currently am in charge of completing technical reviews of the complete FHA loan file and then issuing the mortgage insurance certificates on FHA connection on a delegated basis. Currently about 1 in 10 of my files will be requested for QC by the HOC based on a algorithm, even though we are delegated. I have to send FHA a case binder(copy file) with the original appraisal report and DE underwriter's approvals. Also, any loan that is a manual underwrite(meaning DU or LP Refer) is pulled for QC by FHA. What they do with the appraisals I send them, I do not know. They do request files from us at random to review our DE underwriters. From what I have gathered from a compliance officer I work with, FHA looks for trends with lenders, underwriters, and appraisers, rather than isolated occurrences.

Also, just because a loan is FHA doesn't mean it isn't subject to additional investor requirements on the appraisal side. All of our FHA loans being sold to Wells, CW, Chase, and BB&T still hit their internal AVM's. Many of the onerous requests regarding conditions you see coming from the AMC's are based on lender/investor requirements and not the other way around. AMC's are complying with the silly lender requests to keep the business coming in. I'll try to see If I can get some information on what percentage of our originated loans last year were appraisal reviewed. Also, keep in mind, FHA's review and audit policy is based on the lender's performance and loan delinquency rates.

 

[timd354]

Just go to the following link and you will see where the FHA is bidding out field review work in several states....http://www.HUD.gov/offices/cpo/contract.cfm

Just like with the AMC's, cheap will undoubtedly win out and quality will take a back seat....and the "New Subprime" will just keep rolling down the rails on the way to taxpayer oblivion.