FHA Appraisal Transfer Changes Effective January 1, 2010

By
Mortgage and Lending with Prospect Mortgage NMLS #151088

On September 18, 2009, HUD announced changes to the guidelines pertaining to the transferring of a FHA appraisal.  This announcement was made in Mortgagee Letter 2009-29.  These changes are effective for all FHA case numbers assigned on or after January 1, 2010.

This mortgagee letter addresses the portability of appraisals for the purpose of facilitating the loan process when a borrower switches from one Federal Housing Administration (FHA) approved lender (first lender) to another (second lender) and an appraisal was ordered by and completed for the first lender. 

FHA prohibits "appraiser shopping" where lenders order additional appraisals in an effort to assure the highest possible value for the property and/or the least amount of deficiencies and/or repairs are noted and required by the appraiser.  

A second appraisal may still be ordered by the second lender under the following limited circumstances:

1.            The first appraisal contains material deficiencies as determined by the Direct Endorsement underwriter for the second lender.

2.            The appraiser performing the first appraisal is on the second lender's exclusionary list of appraisers.

3.            Failure of the first lender to provide a copy of the appraisal to the second lender in a timely manner would cause a delay in closing, posing potential harm to the borrower.

Potential harm includes events outside the control of the borrower such as loss of interest rate lock, purchase contract deadline, foreclosure proceedings, and late fees.

If a second appraisal is ordered, the lender must document why a second appraisal was completed. 

Appraisal Transfer and Change of Client Name in Appraisal Report

In cases where a borrower has switched lenders, the first lender must, at the borrower's request, transfer the case to the second lender.  FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.

In accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment.  To effect a client name change, the second lender and the original appraiser may engage in a new appraisal assignment wherein the scope of work is limited to the client name change.  A new client name should include the name of the client (lender) and HUD.

This is one of many recent changes HUD has announced concerning FHA appraisals.

 

 

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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

Georgia Dream Down Payment Assistance Program Overview/Updates

HomePath Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  

Programs Include:

  • Conventional (Fannie Mae & Freddie Mac)
  • HomePath - #1 Volume Retail Lender
  • HomePath Renovation
  • FHA
  • FHA 203K Renovation Loans (Streamline or Consultant)
  • Georgia Dream Down Payment Assistance
  • Jumbo
  • USDA
  • VA
  • Conventional Condo Project Approvals
  • FHA DELRAP / HRAP Condo Project Approvals

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Rodney Mason is a Sr Loan Officer located in Atlanta, GA.  He is also 203K Renovation Loan and HomePath REO Property Specialist.  He can be reached at (404) 591-2453.

Providing financing for cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.


Providing financing for cities across Alabama including: Alabama Port,
Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

 

               

NMLS #151088 - Licensed in AL & GA.  HomePath® is a registered trademark of Fannie Mae.

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Rainmaker
1,176,897
John Pusa
Sellstate Pacific Realty - Glendale, CA
Your All Time Realtor With Exceptional Service

Hi Rodney, a very important article, thank you for sharin it with us.

John Pusa

Oct 03, 2009 11:17 AM #1
Rainmaker
97,987
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

I didn't see this yesterday and wrote a similar post.  This is good information.  I am surprised how many lenders don't get this.

Apr 14, 2010 08:46 AM #2
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Rainmaker
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Rodney Mason

FHA 203K, USDA, VA, HomePath Renovation Specialist
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