Appraisal

Starting on the 15Th of February,  all FHA loans requiring an appraisal (including  HECM Reveres Mortgages) must be ordered through an appraisal management company (AMC). I would strongly encourage the borrower to work with their loan officer and order a preliminary electronic evaluation of their property first, commonly referred to as a AVM. These are electronically generated reports using sold properties of similar age,size, type, and location. They generally cost between 20-40 dollars depending on the detail.

While these can be useful in giving you a possible range of value it will never replace the traditional appraisal done by licensed appraiser who actually comes to the property and does a full site inspection and researches all the sold and listed comparables in the area. It’s important to know these reports from the AVM’s are strictly  an estimate of value and not a guarantee.

Borrower’s should be prepared for some appraisal changes taking effect on February 15th 2010. All FHA loans, including Reverse Mortgages, will be required to comply and adopt the Appraial Independence rules that took affect in 2009 for all non FHA loans.

After the 15th of February all appraisals will be required to be ordered through an AMC ( Appraisal Management Company) the AMC will then contact a local appraiser and request the appraisal. The appraisal is then completed and submitted directly to the underwriter working on the loan. The loan officer and borrower are not allowed to have any direct contact with the appraiser. The idea behind the new rules is to eliminate any possibility of manipulating the appraisers estimation of value

Borrowers will want to make sure they have done thier homework on what similar homes are selling for in their neighborhood. Working with an experienced loan officer will be helpful in gathering this information.