My New Blog

Home Valuation Code of Conduct: Now What?

Frequently Asked Questions

The way appraisals are ordered and transmitted to the client has changed!

The way appraisers must determine value has changed!

Listed below are the most frequently asked questions regarding appraisal-ordering procedures and what now must be included on an appraisal report. Just a note—HVCC applies to conventional loans only. FHA, VA and USDA loans are exempt from this rule.

How does an appraisal get ordered?

You must order an appraisal thru an Appraisal Management Company who in turn, assigns the appraisal order to ANOTHER appraiser—or the mortgage company’s independent person who has nothing to do with the origination of the loan.

What is an Appraisal Management Company?

It’s a third party, independent company formed for the specific purpose of being a middleman in the appraisal ordering process. With this additional layer of management, the appraisal costs more.

Can I talk to the appraiser?

Lenders must provide a copy of the purchase agreement but are prohibited from speaking with the appraiser about value. However, there is nothing in the HVCC rules prohibiting real estate agents to discuss the transaction with the appraiser.

What’s the buzz about the “value trending” appraisals must now include on the appraisal report?

In addition to traditional sales comps, appraisers must now provide a “trending analysis”. It’s a new form where they must include the following information: Sales Price compared to Listing Price (shown as a percentage); months of housing supply, days on the market, sales activity compared to the overall sales, seller concessions and number of sales of foreclosed properties. Yes, it could affect the appraisal value.

What if the value comes in lower than the sales price?

The real estate agent needs to provide additional information or comps to support the value to the lender.

The lender in turn, sends to the appraisal management company, who gives it to the appraiser. Expect delays.

Can an appraisal be assigned to another lender?

Yes, but the lender who ordered the appraisal must agree to the transfer.

Can the borrower/client pay for the appraisal at the door?

No, it must be paid by credit card by the lender ordering the appraisal.

What’s the 3-day appraisal notice to the borrower all about?

The borrower has 3 days to “review” the appraisal and the loan cannot be closed until the 3-day waiting period has elapsed. However, the borrower can sign a waiver if they wish to close earlier than the 3-day waiting period.

The appraisal report can be sent to them by email or if no email address, a printed copy by the appraisal management company.

If you have more questions about these need appraisal methods, email me: cnassief@tmes.com

Or

Call: 703-255-5810

We are dedicated to keeping you informed!