Appraisers are finally being heard.
As a result of grass roots complaints by appraisers about diminishing appraisal quality in industry blogs, publications, the general media, and in a formal appeal by a coalition of appraisal organizations, the Federal Housing Administration (FHA) announced several important policy changes intended to increase accountability and due diligence in the appraisal process. The changes take effect January 1, 2010.
In support of appraiser independence and to address other AMC-related issues, FHA issued three Mortgagee Letters in September with new requirements for appraisal ordering and which mandate the separation of appraiser fees from AMC fees. In addition, FHA now requires that appraiser fees be “customary and reasonable.”
Other important issues addressed in the Letters are the validity period for appraisals (reduced to four months); the allowance of a second appraisal to be ordered under certain circumstances when a borrower switches from one lender to another, geographic competency and appraisal portability standards. You can find these three important Mortgagee Letters at WorkingRE.com, Sidebar: FHA Mortgagee Letter 2009-28, 2009-29 and 2009-30.