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#1146910 - 03/18/09 03:09 PM Ordering Appraisals - New requirement May 1st?
Gertie Offline
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Joined: Jun 2005
Posts: 88
Hello,

Some of our loan officers just left a meeting with our rep for secondary market loans.

The rep told our group that effective May 1st of this year the recommendation that appraisals be ordered from an independant source (not the loan officer) was no longer a recommendation but MANDATORY by Federal Reg. Did I miss something?

Thanks

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#1147052 - 03/18/09 04:31 PM Re: Ordering Appraisals - New requirement May 1st? Gertie
ktac MITCH Offline
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ktac MITCH
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Posts: 1,813
Giant side of TX
In Nov The FFIEC Regulators released for comment new Appsl Guidelines, basically to bring them up to 2006 USPAP changes and to beef up the required review process.
What you are likely talking about is the Home Valuation Code of Conduct that was released in Jan & applies to banks that sell loans to Fannie or Freddie. But before you say "My bank doesn't sell to them so this doesn't apply to us". . .
The secondary market purchaser you sell to - does sell to FNMA & Freddie so it is basically trickle down. Your purchasers are saying we have to follow this new HVCC and therefore if you want to sell to us you have to follow it too.
See This prior thread
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#1149453 - 03/23/09 01:10 AM Re: Ordering Appraisals - New requirement May 1st? ktac MITCH
tjbanker Offline
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Our institution is also under $250,000,000 but we do sell to investors that sell to Fannie. What are other institutions doing about the requirement that anyone in the loan production area cannot order the appraisal? Can the appraisals be ordered randomly off of a list? Can loan processors pick the appraiser? We don't have anyone qualified outside of the secondary market loan production area that would be qualified in selecting appraisers. Thanks for any help.

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#1149461 - 03/23/09 03:14 AM Re: Ordering Appraisals - New requirement May 1st? tjbanker
Ray_ Offline
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Joined: Aug 2006
Posts: 879
Dallas, TX
We are also a bank under $250 million. We have changed our procedures so that the "back office" Credit Administration staff order all appraisals.

We rotate our appraisers randomly from our board approved list. We do, however, consider each appraiser's market area when selecting.

We do not allow the loan processors to choose. Anyone that directly makes (approves) loans and the people that work for them are not involved in the process.

What qualifications would they need to order an appraisal? As long as you have a board approved list and they have a general understanding of the appraisers market area, I don't see the problem. Now, reviewing appraisals is another issue.

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#1169986 - 04/24/09 06:02 PM Re: Ordering Appraisals - New requirement May 1st? Ray_
Tesla Offline
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What are the requirements for someone to review the appraisal? For instance, where do you find training for this individual?
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#1170027 - 04/24/09 06:41 PM Re: Ordering Appraisals - New requirement May 1st? Ray_
ccman Offline
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Appraisal reviews for small banks will be a challenge. If attempted in-house the person or dept. will need to be independent of the lending function and have the required skills to review the bank's appraisals. The HVCC has complicated the process enough now the state's are getting in on the act with new laws regarding Appraisal Management Companies. Has anyone considered using a third-party source for ordering and reviews?

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#1170039 - 04/24/09 06:49 PM Re: Ordering Appraisals - New requirement May 1st? ccman
Tesla Offline
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We are a small bank and we do, what I call, a compliance review of the appraisal. Is it signed, is the appraiser's license current, is it the right house, was it ordered by the lender?, etc. It does not get into is the value appropriate, etc. SO FAR - this has been ok, but to comply with HVCC I am trying to get a dedicated person for ordering and reviewing appraisals. This person is currently a teller. I want to get her trained, but I am not sure if the compliance review we do is enough or if I need to send her to an appraisal school (class) on appraisal review. What is required?
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#1179212 - 05/08/09 03:52 PM Re: Ordering Appraisals - New requirement May 1st? Tesla
liventhedream Offline
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What qualifications would they need to order an appraisal? As long as you have a board approved list and they have a general understanding of the appraisers market area, I don't see the problem. Now, reviewing appraisals is another issue.


Has anyone figured out the answer to the above question yet?

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#1179405 - 05/08/09 05:47 PM Re: Ordering Appraisals - New requirement May 1st? liventhedream
Truffle Royale Offline

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Maybe I'm not understanding this one so bear with me.
You hand the name and address to a teller to order an appraisal from a list. The appraisal comes back with three others that were ordered the same week. The cover page has the name and address right there. The processor sorts the appraisals into the proper files to hand to the underwriter who does the evaluating. HVCC has been adhered to. No special person and/or special training required. This is really more of a molehill than a mountain, imho.

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#1180608 - 05/11/09 07:13 PM Re: Ordering Appraisals - New requirement May 1st? Truffle Royale
TattChica Offline
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Va Beach, VA
We have a "set-up" person who does compliance on all incoming loans and he is the one that orders all appraisals, off of a rotating list. And like Truffle says our underwriter still reviews the appraisal.
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#1180610 - 05/11/09 07:15 PM Re: Ordering Appraisals - New requirement May 1st? TattChica
Burgess Offline
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a couple of people put in their posts "under 250,000,000" - is there an exclusion for under 250 million in assets?
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#1182406 - 05/13/09 04:16 PM Re: Ordering Appraisals - New requirement May 1st? Burgess
Queen Mum Offline
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OK
I also have a question about the new form stating that the appraisal was supplied to the borrower no less than 3 days before loan closing. I know this is relevant to secondary market loans. But what about in-house loans that are not sold on the secondary market that have an in-house appraiser that does an appraisal evaluation? Our loan processor has not added this form to the software and we have loan applications that have been taken since May 1st. Are we reguired to follow the same rules? We were told that a new Federal Law will morror this, but does this mean that it's not yet valid on in-house?

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#1182776 - 05/13/09 07:47 PM Re: Ordering Appraisals - New requirement May 1st? Queen Mum
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What new form, QM? The only form I know of that HVCC refers to is the Waiver form the borrower must sign in lieu of getting the appraisal.

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#1182787 - 05/13/09 07:51 PM Re: Ordering Appraisals - New requirement May 1st? Truffle Royale
Queen Mum Offline
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OK
That's it! I couldn't think. I just knew it was something different thatn the "Right to Receive Copy.." form that we have been having them sign for years. Is this form only for secondary market or for in-house too? Our loan processor does not have it added but our secondary market providers have sent it saying it has to be used.

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#1182843 - 05/13/09 08:30 PM Re: Ordering Appraisals - New requirement May 1st? Queen Mum
Truffle Royale Offline

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I haven't heard anything from our secondary yet and I was just asking how this was going to be handled today.

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#1182850 - 05/13/09 08:34 PM Re: Ordering Appraisals - New requirement May 1st? Truffle Royale
Queen Mum Offline
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OK
If you want to PM me, I will get a copy from our secondary market loan officer and let you know what our secondary market people have sent us.

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#1182859 - 05/13/09 08:39 PM Re: Ordering Appraisals - New requirement May 1st? Queen Mum
Truffle Royale Offline

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too funny. I just did while you were posting this. Great royal minds.... wink

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#1182925 - 05/13/09 09:42 PM Re: Ordering Appraisals - New requirement May 1st? Truffle Royale
CSB98 Offline
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Wisconsin
Is this a form provided by the secondary market? I don't think that we're using it and I can't find it on Freddie Mac anywhere.

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#1182993 - 05/13/09 11:30 PM Re: Ordering Appraisals - New requirement May 1st? CSB98
Truffle Royale Offline

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It's a form from a secondary market investor. The form states the obvious regarding the fact that the borrower should have gotten the appraisal at least three days prior to closing...yada yada yada.

So far, the one QM has is only from one investor. I deal with three others and have heard nothing yet from any of them. We're going to do nothing until an investor tells us we have to. I've got enough on my plate trying to deal with Reg Z changes.


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#1183063 - 05/14/09 12:50 PM Re: Ordering Appraisals - New requirement May 1st? Truffle Royale
ahkcompliance Offline
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Midwest
Do we need o use this form on in-house loans?

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#1183287 - 05/14/09 02:32 PM Re: Ordering Appraisals - New requirement May 1st? ahkcompliance
Truffle Royale Offline

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HVCC only requires a Waiver Form be used if the applicant chooses not to receive a copy of the appraisal.

I'm not surprised that one investor already wants confirmation that the borrower received their appraisal copy to comply with HVCC. I'm sure the others will follow suit shortly. Whether they'll present a form they want used or let each FI come up with their own is the question.

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