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Reverse Mortgage Appraiser Changes
The Federal Housing Administration (FHA) has announced recently that it is adopting the rules of the recent document called the Home Valuation Code of Conduct (HVCC) for appraisers and it does apply to a reverse mortgage appraiser. This document was created through the efforts of Freddie Mac, the Federal Housing Finance Agency (FHFA), and the Attorney General in the State of New York.
For a long time it has been felt that there was kind of a conflict of interest when the reverse mortgage appraiser and the lenders work together. It seemed like a partnership made in Heaven because the lender could actually control to some degree the outcome of the appraisal – if they wanted.
What had been happening in some cases was that the lender would hint to the reverse mortgage appraiser a general figure that they were looking for when they hired them. The reverse mortgage appraiser quickly learned from experience that if they wanted to go on more appraisals for that company that they would have to come pretty close to the figure they were given. This arrangement gave a lot of power to the company selling a reverse mortgage loan.
One more problem was that a reverse mortgage appraiser was sometimes being sent quite a distance from their own familiar location to an area of which they knew nothing about real estate prices. This led to a wide variation of valuations and many potential borrowers would be rejected when this happened.
Changes in Procedures for the Reverse Mortgage Appraiser
The HVCC was created to put an end to these problems and propose a workable and satisfactory solution. The first thing they put in the document was to create a wall between the two groups and cause the selection of the appraiser to be taken out of the hands of the reverse mortgage association. This would prevent a collaboration that favored the lender.
Another thing that was done was to establish a set fee for the reverse mortgage appraiser when hired. The fee is now set and it would have to be paid for by the owner – when it is ordered. One potential problem here, though, is that if an appraisal is either too high or too low, the reverse morgage borrower would have to pay for another appraisal – and still may be turned down.
Other Changes for Reverse Mortgage Appraiser Not Yet in Effect
Another major consideration changed by the document is the new time frame that an appraisal is good for. It used to be that when you applied for a reverse mortgage, that it was good for six months. This will soon change. As of January 1, 2010, it will only be good for four months.
At this time, the FHA has basically adopted the HVCC as a whole. It is presently working on making it perfectly in agreement with its own practices which may mean further changes or additions before January 1, 2010.
If you would like more information, please call (866) 683-3690 or visit Reverse Mortgage Appraiser.
Tags: hecm appraiser changes fha, reverse mortgage appraiser changes, reverse mortgage records changes
