FHA changes 9/14/15 - what does it mean?
Lots of very different opinions. What do I say? More work and higher fees for those who are doing FHA appraisals!! What do I do? Nothing, since I don't do FHA appraisals. Never did like those creepy attics and crawl spaces ;> My business decision, of course.
I can't wait for the strange interpretations from AMC "reviewers" since FHA employees seem to be giving different answers ;> I still can't figure out why FHA does not do a webinar for appraisers to go over the controversial issues. Of course, there are those who say nothing has changed much, both FHA and experienced FHA appraisers ....
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Crawl space and attics
Random Internet postings....
Man killed in crawlspace of Oklahoma City home, may have been electrocuted
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Posted on facebook, reportedly from FHA employees:
- If you can fit through the crawlspace door you must crawl the crawl space and inspect it all.
- Must inspect all the attic if there is access, even if there is no flooring.
My comment: If you're fat, don't have to inspect all of the crawlspace? Lots of stories about snakes, rats, dead animals, etc etc in crawl spaces. Appraisers crawling along ceiling joists and going thru the ceiling. Hmm... maybe FHA appraising is for the young, agile and small ;>
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TRID - what does it mean for appraiser fees?
Source: Workingre
Excerpts:
Much like the GFE (Good Faith Estimate), the Loan Estimate (LE) must be sent to a borrower within three business days after the borrower applies for a loan. However, while the GFE previously allowed for a 10% variance in appraisal fees, the new TRID rule now classifies appraisal fees in the zero-percent tolerance category-along with all the other fees that consumers cannot shop for.
The result of this change is that, except in very specific circumstances, the original appraisal fee quoted to the borrower cannot be changed. There are six exceptions where zero-tolerance fees (like appraisal fees) may be adjusted based on specific criteria. These instances include: (1) a changed circumstance, (2) a changed circumstance requiring eligibility, (3) revisions requested by the consumer, (4) interest rate dependent changes, (5) expiration of terms due to consumer delays, and (6) a delayed settlement date on a construction loan.
(Editor comment: for appraisers, the issue is changed circumstance, such as location next to a freeway or buyer said it was a single family house and it is a duplex)
Well worth reading - October 3 is coming soon. Understand the issues. Be prepared for changes in fees.
More on TRID from appraisalport blog
Excerpt:
So as an appraiser why should you even care about TRID? As stated above this rule has nothing to do with how you complete your appraisal assignment. However, in some cases it may have an effect on something near and dear to you - your fee.
Even with those potential problems, this isn't something appraisers should panic over. First, the rule doesn't allow the lender to go back to the borrower for an increased appraisal fee, but that doesn't mean lenders can't cover the difference between a higher actual appraisal fee and the disclosed appraisal fee themselves. Second, and this brings us back to our original poll question, appraisers can work with their lender clients to help ensure lenders understand your fees for complex assignments. Finally, your usual market area will have a lot to do with how much this affects you. If you are in an area where the properties are very homogeneous and have about the same level of complexity, you may never notice anything different. However, if your area varies greatly in the size and complexity of the properties, you may face some of these challenges.
My comments: Although many appraisers don't seem to care about TRID, I am predicting big problems getting fee increases for the "tough ones". And for FHA appraisals. Hopefully I am wrong.
Lots of differing opinions on how lenders and AMCs will handle changed circumstances. You may need to change your business model for fees to match what each AMC is doing. Asking for an increase may be a big problem for a lender or AMC. Or, maybe they will quote high fees post-TRID. I know AMCs are worried about TRID. Also, I suspect that lenders and AMCs will vary widely on how they handle TRID.
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Ex-appraiser gets 42 months in mortgage fraud schemes
Excerpts:
After a two-day sentencing hearing, U.S. District Judge Terrence McVerry imposed that term on James Lignelli, 59, and ordered him to pay $300,000 in restitution to the lenders he ripped off by preparing false appraisals.
Lignelli was found guilty of bank fraud at trial last summer, although the jury acquitted him on counts of bank and wire fraud conspiracy.
Lignelli and his lawyer argued that he was a dupe for the others, who he said had supplied him with false information about the properties. In trying to avoid jail, he also said he had already been punished because he's lost his career and reputation.
But Mr. Conway said Lignelli was no dupe, but a white-collar crook who knew exactly what he was doing. In addition, he said Lignelli deserves no breaks because he was a trained, intelligent professional appraiser who deliberately inflated appraisals. In addition, he said, the relatively small group of appraisers in Pittsburgh need to realize that fraud will be punished by jail.
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Judge got it wrong - again - Ohio former appraiser released from jail twice - identity theft
Excerpt:
Once again, the Franklin County Court of Appeals has told a Common Pleas judge that she got it wrong when she granted early release to Daniel J. Nichter, a former public official convicted of identity fraud.
It's the second time Judge Kimberly Cocroft has ruled that Nichter doesn't need to complete what remains of his four-year prison sentence, only to be overruled by the Court of Appeals.
Nichter's appraiser's license was revoked by the state in March 2008 after he inflated the value of a Near East Side property. Investigators determined that he continued to appraise properties by using the names of licensed appraisers without their knowledge in 2009 and 2010.
His guilty pleas were linked to three 2009 transactions, each of which used a different appraiser's name. He included false information in the appraisals to inflate property values, investigators said.
Nichter, of Snowberry Lane in Hilliard, reached a deal in which prosecutors dismissed 45 other counts, including forgery, theft and engaging in a pattern of corrupt activities. He faced more than 50 years in prison if convicted on all counts.
