In the last couple of days, Ive talked to a couple of appraisers who called with questions. They sounded unusually harried, and now I realize why. There are new and much more stringent FHA and conventional appraisal guidelines in effect for appraisals done after April 1, 2009.
10 things that appraisers must do or provide for all FHA appraisals done after April 1, 2009:
1. The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71).
2. At least 2 comparable sales within 90 days of appraisal date.
3. A minimum of 2 active listings or pending sales in addition to the 3 closed comparables.
4. Bracketed listings using both dwelling size and sales price when possible.
5. Adjust active listings to reflect the List To Sales Price Ratio.
6. Adjust pending sales to reflect contract sales price when possible.
7. Include original list price and any revised list prices.
8. Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales.
9. Absorption Rate Analysis.
10. Known or reported sales concessions on active and pending sales.
FHA also is restating its warning that..."Direct Endorsement Lenders are reminded that if the appraiser they selected provides a poor or fraudulent appraisal that leads FHA to insure a mortgage at an inflated amount, the lender is held responsible equally with the appraiser for the integrity, accuracy and thoroughness of an appraisal submitted to FHA."
2 comments:
Does this mean we will see appraisals ending up even lower?
Not necessarily lower, but much more difficult for the appraisers...more of the backlash from the "anything goes" loans of the past.
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