Blog of the Mortgage

2007 and 2008 have been tough on values. Everywhere. In California, if FNMA hasn't listed the county as declining then the MI company has and even when those two haven't perhaps the lender has?
There are lots of moving parts to be sure.
The Appraisers that are left are having a heck of a time keeping up with requirements and changes. Add to that any HUD requirements for FHA loans and you've got appraisers that are generally less than happy about having to go back and make corrections.

The number one thing that I try to do (as much as possible) is educate on what is required for Appraisal.
Please print out the linked document and forward it to all of your appraisers. Having them complete the items on this checklist will ensure that you don't have additional conditions at the very end of closing.

When it comes to underwriting Refinances:
If at all possible wait for the completed appraisal to come in and send it along with the submission package.

When it comes to underwriting Purchases:
If at all possible send your purchase contract, prelim and appraisal with your submission.

With respect to FHA (visit my Government page here)
Appraisals require:
Remaining Economic Life (which is why most appraisers are completing the "Cost Approach" section and charging extra on your FHA appraisals).
The appraisers are required to inspect the Property to the satisfaction of HUD's requirements and make at minimum the following statement.
"I hereby certify that the property was inspected and specific systems tested per the 4150.2 and property meets min HUD property standards."
Otherwise the appraiser will have to completely list out in detail how and what he inspected as required by
HUD.
HUD is just now circling back and calling appraiser's that have neglected to address this statement/requirement properly and asking them very kindly to make these corrections (this straight from a 20 year appraiser who personally took one of these calls).
The pervasive issue in the industry is generally lack of understanding with respect to new products.
If your Lender (other than us of course :) ) isn't asking for this to be done that doesn't mean that it is not a requirement.
HUD will randomly audit the files as they come through and shortly there after the sponsoring lender will have to call the appraiser to make corrections in order to gain insurance from HUD.
HUD/FHA business can sometimes arduous but at the same time you have to remember:
1. These are after all Government loans
2. These are loans that aren't otherwise available and then only to a certain set of originators (you guys!).
3. By planning ahead you too can outwit the Government (well, at least a little bit)