can you transfer a conventional appraisal to another lender

Anyone who is not part of loan production staff or who is not compensated on a commission basis upon successful completion of a loan or anyone who does not report, ultimately, to any officer of the lender not independent of the loan production staff or process, may have communications with an appraiser relating to or having an impact on valuation, including ordering or managing an appraisal assignment. It can be done the same day, usually 24 hours though. As it is a new assignment, the appraiser is Fannie Mae: Appraiser The new lender will order a new conventional appraisal. All rights reserved, Conventional Appraisal Guidelines on Transfering a Home Appraisal From One Lender to a New Lender. Still another common misconception is that taking a subsequent assignment with another client would be a conflict of interest. One cannot have a conflict of interest unless one first has an interest. new client name should include the name of the client (lender). What Third Party Service Does the Underwriter Rely on to Secure a Mortgage Loan? For example, in a non- waiver situation, if a borrower received an appraisal on Monday, the closing could be held on Wednesday. As a risk control measure for certain loan products, it may be common for a lender to order more than one appraisal, and this section does not prohibit that practice. AIR is specific to a mortgage financing transaction, and cancellation of mortgage insurance is not a mortgage financing transaction. The Fannie Mae Servicing Guide states that To determine the current appraised value of the property, the servicer must select an appraiser, order a new appraisal (which must be based on an inspection of both the interior and exterior of the property and be prepared in accordance with our appraisal standards for new mortgage originations), and receive the results of the appraisal.. Mortgage Compliance FAQs: Obligation to Transfer Appraisal Mortgage FAQs by Experts in Residential Mortgage Banking Creators of the Compliance Tune-up POWERED BY: LENDERS COMPLIANCE GROUP ABA Disclosure Ability to Repay ACH Adverse Action Advertisements Affiliate Marketing Affiliated Business Arrangements Affiliates AML Anti-Money Laundering APOR While this could be avoided by obtaining the first clients permission to provide the report to the second client, it still does not resolve the third reason why it is improper to readdress the report which is that to do so is misleading. Most new lenders like Gustan Cho Associates will expedite all transfers so the . Yes. One additional point regarding assignments for lenders: Appraisers should be aware that the appraisal requirements of FIRREA allow a regulated lender to use a report that was prepared for another financial services institution. xeRn0+|l! AIR allows an appraiser to perform an update of an appraisal for another lender. If you're selling your home, you can ask your real estate agent for a list of recommended appraisers in your area. Yes. complies with AIR. However, the lender delivering the loan to Fannie Mae makes all representations You have good credit, good stable income, and reserves to close your home loan in time. No. No. AIR does not prohibit the appraiser from talking with the real estate agent. However, there are cases where appraisals come in lower than the purchase price of the home. in order to transfer a conventional loan to another lender you must have the following credit authorization; written request from the borrower to transfer **4 A borrower is closing on a home on july 17th and needs to lock in their rate 60 days prior to the close date. An AMC affiliated with, or that owns or is owned in whole or in part by the lender or a lender-affiliate, may order appraisals if the AMC meets the criteria of Section IV.A. This is due to regulations created in fear of the loan originator might influence the appraiser to come up with a higher value. No. from pulling your credit report to wiring transfer fees. Q3. Fannie Mae without a new appraisal if Lender B can represent and warrant that Even if the original appraiser/client relationship is disclosed, this problem cannot be overcome. Selling Guide and related documents. We define closing as the date the borrower executes the loan documents. Yes. After seven months of making on-time payments at a 6% mortgage rate, your loan balance would be paid down to around $330,000. The lender is responsible for ensuring that the borrower receives a copy of the appraisal. Here are HUD Guidelines ON FHA Appraisal Transfers: Locking Rates During Volatile Markets At an absolute minimum, the degree of separation should be no less than one level up in the reporting structure. %PDF-1.5 % Q37. Once you are clear on what the requesting party is asking you to do, the following Q&As might help you decide how to respond. 0000004416 00000 n The appraiser still gets paid regardless. Loan officer at first lender is telling me that their manager said the appraisal could not be released to the 2nd lender, even though it was done 2 weeks ago, and even though that appraiser is on the second lenders approved appraisers list. Learn More About Conventional Appraisal Guidelines: CLICK HERE. Also, Section VIII provides for lenders to have written policies and procedures implementing AIR, including rules on appraiser independence, and to have mechanisms in place to report and discipline anyone who violates these policies and procedures. Wait for PMI to automatically cancel. They need to state the reason why they feel that the low appraisal is not justified. what date should the borrower lock in? If the lender receiving the transferred appraisal determines the First, simply changing the name of the client and then forwarding the readdressed report to the second client does not change the first appraiser-client relationship. Will Freddie Mac hold Lender B liable for remedies if it is discovered after Freddie Mac: Appraiser Independence Requirements FAQs. Such a notion would be inconsistent with the underlying principle in USPAP that the appraisers role is to be independent, impartial, objective, and unbiased. To add intended users after the fact, or to change the intended use, is putting the cart before the horse. No. An appraiser-client relationship, once established, is cast in stone and cannot be changed. . Mortgage FAQs by Experts in Residential Mortgage Banking. How can I save money on home appraisal costs? This means that Lender B can use a report that was prepared for Lender A, even though Lender A shows as client on the report. AIR does not prohibit a borrower from providing payment to an AMC; however, the borrower may not pay the appraiser directly for an appraisal. For example, if rates drop, your lender might allow you to re-lock at the lower rate if you pay a float-down fee. This new assignment will require the appraiser to at least reconsider or reanalyze the process outlined in USPAPs Standard 1, especially with regard to identification of intended use and scope of work. Can lenders accept an appraisal from an AMC specifically authorized The lender must provide the copy promptly upon completion of the appraisal, but no less than three business days prior to closing. The seller may provide the borrower at closing a revised copy of an appraisal and information as to the nature of any revisions, so long as the revisions had no impact on value. Homebuyers will have contingency clauses for a home inspection and home appraisal on their home purchase contracts. So what should you do if youre asked to readdress a report? The appraiser must use his or her discretion in deciding whether or not to reveal information about a prior assignment to a subsequent client beyond what is required by the aforementioned disclosure. 0000005173 00000 n Comparable approach appraisals are based on similar and like properties that are similar to the subject property within a mile radius. I've got 17 years in the business. According to the definitions of intended use and intended user, both must be identified by the appraiser at the time of the assignment, not after the appraisal process is completed and the report is finished. The first is the appraisal can note that the property is in need of repairs that do not meet lending guidelines such as broken windows, peeling paint, non-functional electrical, plumbing, and/or HVAC. 0000003428 00000 n However, home appraisals are mandatory. To be named as the client in a report, one must have been the party who engaged the appraiser. If this is the case, the home buyer can order an appraisal rebuttal through their lender. AIR also does not affect the acceptable scope of work for an appraiser in connection with a particular assignment. If the first lender has ordered an FHA appraisal, the appraisal can be re-used: FHA Home Appraisal transfers when the new lender requests FHA Case Number transfer Borrowers who had a conventional appraisal done, the chances are that a new conventional appraisal need to be ordered hVn8>X"Pp85t$Yke"=ChbA&F31LLck The lender must review its systems to ensure that the selection-of-appraiser process is in compliance with AIR. The mortgage application process now starts and your home closing is scheduled for 30 days. Can I sign or issue a reliance letter that says another party (not the identified in the report as the client or an intended user) can rely on a report I previously prepared? In many cases, real estate agents can be a source of data in the market in which the subject property is located. A lender may accept an appraisal from a different lender if the 0000002244 00000 n Also see FAQ #120which deals with reliance letters. These Advisory Opinions and FAQ are published with the Uniform Standards of Professional Appraisal Practice (USPAP). Comparable homes used to compare the subject property can be larger or smaller. AIR applies to all loans of one- to four-unit properties, except government-insured loans as noted in Q5, delivered to Fannie Mae. 0000064021 00000 n May a mortgage broker order an appraisal directly from an AMC that was specifically authorized by the lender? However, the FAQs prepared by federal agencies on the agencies appraisal regulations specify as follows: The loan production staff consists of those responsible for generating loan volume or approving loans, as well as their subordinates. This document was developed in response to recent questions about the agencies' real estate appraisal regulations and guidelines and replaces previous FAQs on the appraisal regulations issued in . The first client does not need to give permission for you to proceed with another assignment for a second client unless confidential information is at stake. For example, in an appraisal report factual data such as sales comparables are not confidential (unless they were made available by the client and are not available from another source). 0000004666 00000 n No. Conventional lenders will require a conventional loan appraisal. startxref One caveat about taking on assignments with property owners: Appraisers who are contacted by property owners about providing valuation services for which the intended use is in conjunction with mortgage lending must advise those property owners that the assignment must be engaged directly by the lending institution. For example, a lender may obtain a waiver from a borrower through an e-mail, phone call, or some other means, prior to the three-day period, and then have that waiver recorded in writing at the settlement table or at some other time. Can lenders accept appraisals transferred from another lender? This means that a copy of the report showing confidential information and assignment results cant be given to, revealed to, or shared with anyone other than the client and persons specifically authorized by the client; state enforcement agencies; duly authorized professional peer review committees;and such third parties as may be authorized by due process of law. Home appraisal reports are extremely detailed and consist of the following: The appraiser will not his opinions and other comments on the home appraisal report. Other times, the request may be for you to provide an update, or a letter update. under no obligation to do), and certify compliance with the Appraiser AIR allows Lender B to originate a loan using an appraisal . Fannie Mae requires the appraiser to provide complete and accurate reports; to report neighborhood and property conditions in factual and specific terms; to be impartial and specific in describing favorable or unfavorable factors; and to avoid the use of subjective, racial, or stereotypical terms, phrases, or comments in the appraisal report. Note that in accordance with A balance transfer fee is a charge imposed by a lender to transfer existing debt over from another institution. 0000012531 00000 n Why? And finally, there is no requirement to disclose for whom the prior service was performed; the appraised value, if any; or exactly when in during the three year period the service was performed. 0000063431 00000 n FHA appraisals, however, can be easily transferred. The word completion is meant to reflect when the lender has reviewed and accepted the appraisal to include any changes or corrections required. Appraisers are often confronted with one of a variety of questions relating to the same general problem. representation and warranties under the Guide, Freddie Mac will hold Lender B, 0000003551 00000 n requirements and is otherwise acceptable. We will also compare transferring an FHA appraisal versus a conventional home appraisal from one lender to a different mortgage lender. Most appraisers will look for comparable sales within a mile radius of the subject property. An appraiser will look for homes that are similar to the subject property in square footage, style, number of bedrooms, number of bathrooms, and amenities. 0000003303 00000 n He helps people to meet FHA guidelines and obtain a financing for their dream home. 0000063822 00000 n This is not the case with Conventional Loans. If so, you cant take on the assignment without obtaining prior permission of the first client to release that confidential information. An analogy would be if you sold your car to Party A, you couldnt then sell it to Party B, as it is no longer yours to sell. Does anyone have any ideas. Another important factor the appraiser considers is the distance of comparable sales compared to the subject property. 0000064673 00000 n The appraisal belongs to the lender, the borrower pays for it and has a right to receive a copy. They went into effect October 15, 2010. Often it is not clear what clients mean when they use the term recertify, and appraisers need to help remedy the confusion. Yes. This sort of assignment is not an appraisal at all, because in and of itself, it has nothing to do with developing an opinion of value. There are two things that can go wrong with home appraisals. However, the lender delivering the loan to Fannie Mae makes all representations and warranties that the loan complies with the requirements of the Fannie Mae Selling Guide and related documents. The broker later decides to submit the loan to lender B because it The mortgage is sold to Fannie Mae by the lender. The value conclusion might even be the same. According to the Appraisal Standards Board's Advisory Opinion 26, after an assignment has been completed and the report has been delivered, appraisers are sometimes asked to readdress (transfer) the report to another party. Note: An appraisal transferred to another lender and then to Lender/Broker/Client is not acceptable. & Insights, Pricing & Something about this smells illegal, like there should be some kind of consumer protections in place to prevent it. Lenders will honor an FHA appraisal for conventional loans, FHA loans, and VA loans. In-house appraisers may prepare appraisal reports in accordance with Section V. Yes. 0000063679 00000 n Q4. 0000010972 00000 n In many cases, performing a new assignment for a second client would not require the appraiser to divulge any confidential information. Federal . Because Lender B wants the appraiser-client relationship, and all the rights and obligations thereof, to be between them and the appraiser. Fannie Mae customers! information from other Fannie Mae published sources. Lender A (an approved Fannie Mae Seller/Servicer) originates and Transfer of Appraisals A Seller may deliver to Fannie Mae a conventional Mortgage with an appraisal prepared by an appraiser selected by another lender, including where a Mortgage Broker has facilitated the Mortgage application (but not ordered the appraisal). The scenario is as follows: You completed an assignment for a client some time back maybe a year ago, a month ago, a week ago and now another party wants your opinion of the value of the same property. Adjustments will be made to substantiate the value of the subject property. In this article, we will cover and discuss conventional appraisal guidelines and home appraisals during the mortgage process. The requirement that was added to USPAP in 2010 goes on to state that in the event the client requested the very fact that the appraiser performed the appraisal be kept confidential, the appraiser cannot take another assignment involving that property for three years. The transfer of the appraisal is not automatic, and the FHA appraiser is not required "to provide the appraisal to the new Mortgagee" according to HUD 4000.1. They need to list five comparables to the subject property. However, if there are no comparable sales within a mile radius, the appraiser needs to go further out to find comparisons to the subject property. lender and, if so, under what circumstances? violations of AIR and our Guide requirements. 166 0 obj <>stream Identified by the client as confidential when providing it to an appraiser and that is not available from any other source; Classified as confidential or private by applicable law or regulation. It typically involves a real estate appraiser, who will assign a dollar value to the home based on its current market value. The VA will review your application. Geographical area notes such as schools, neighborhood analysis, property values in the area, growth, etc. CLN Can Help. Q7. endstream endobj startxref conventional loan, Lender A would have to release the appraisal (which it is The application date is defined as the date the borrower(s) signed the application certifying that the information is correct. A few key points about this requirement: The certification statement required by USPAP in Standards Rule 2-3 supplies the type and degree of disclosure: I have performed no (or the specified) services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three year period immediately preceding acceptance of this assignment.. Client is defined in USPAP as the party (or parties) who engage an appraiser in a specific assignment. If the borrower is transferring a conventional loan to an FHA Loan, then the Conventional Appraisal needs to be changed to an FHA Appraisal. However, Section I.B. the Uniform Standards of Professional Appraisal Practice (USPAP), a lender is You are a home buyer and entered into a real estate purchase contract and are pre-approved for a home loan. Conventional Appraisal Guidelines During The Home Buying And Mortgage Process, Delays in the Conventional Appraisal During the Mortgage Process, More on Understanding the Importance of Conventional Appraisal, When Is The Home Appraisal Ordered and How Long Does It Take, Conventional Appraisal Guidelines on Having Contact With The Appraiser, Conventional Appraisal Guidelines on the Condition of the Property, Lower Value Than Purchase Price on Conventional Appraisal, Nearby Comparable Recent Sales To The Subject Property Requirements. It is up to the appraiser to determine if the data is applicable and appropriate or not. Q9. AIR prohibits lenders from relying on an appraisal if the broker had a role in selecting, retaining, or compensating the appraiser. Fannie Maes and Freddie Macs FAQs may differ to some extent in style or structure, but present no substantive differences in interpretation or implementation of these requirements, nor do they impose any different operational requirements. Yes. A lender may order appraisals directly from an individual appraiser. 200 W. Madison, Suite 1500, Chicago, IL 60606. A lender may accept an appraisal from a correspondent lender that are not confidential. A correspondent lender may use in-house appraisers if they meet the criteria in Section V. No. 0000054353 00000 n with AIR? appraisal is obtained in a manner consistent with AIR, and the lender receiving What documentation is required during an appraisal transfer to Typically, the reason the second party wants to be named as client is that they want the appraiser-client relationship, and all the rights and obligations thereof, to be between them and the appraiser. 0 As appraisers, we are not in the business of selling reports; we are in the business of selling our expertise and our opinions. No. If the Most lenders have a templated appraisal transfer form that needs to be completed and this is usually a quick process. The lender may direct a broker to an authorized AMC if the lender has previously arranged for its appraisal process to be managed by the specifically authorized AMC. 2006-2023 Lenders Compliance Group, Inc. All Rights Reserved. To whom can I give the assignment results? And other times the requesting party has no knowledge of, and therefore doesnt mention, the previously prepared report. o Correspondent to be sent to lendersupport@fgmc.com If you have a conventional appraisal and now, we need to utilize a NON-QM mortgage product, most of the time, those appraisals can be transferred. Fees generally range between 2% and 5% of the amount transferred or a fixed amount like $10, whichever is greater. It means that as far as the appraiser is concerned, there is to be a new appraiser-client relationship i.e., a new assignment. The Seller delivering the loan to Fannie Mae makes all representations and warranties . Saturday is included for purposes of counting the three-day period. Home appraisals are required by the lender. Each lender must develop its own policies, procedures, and documentation. 0000005500 00000 n for Lender A, can Lender B accept that appraisal? and warranties that the loan complies with the requirements of the Fannie Mae Q15. AIR does not specify what form the waiver must take or whether it be oral or written. Before you transfer a conventional loan to another lender, you must have which of the following? Section III requires the lender to provide, free of charge, a copy of any appraisal report completed in association with a specific loan. 0000003797 00000 n approved Seller/Servicer), which in turn sells that loan to Fannie Mae. See Advisory Opinion 25, Clarification of the Client in a Federally Related Transaction; Advisory Opinion 26, Readdressing (Transferring) a Report to Another Party; and Advisory Opinion 27, Appraising the Same Property for a New Client. endstream endobj 493 0 obj <>/Metadata 36 0 R/Pages 35 0 R/StructTreeRoot 38 0 R/Type/Catalog/ViewerPreferences 494 0 R>> endobj 494 0 obj <> endobj 495 0 obj <>/MediaBox[0 0 612 792]/Parent 35 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 496 0 obj <>/Dest[495 0 R/XYZ 33 689 0]/F 4/Rect[33.75 475.32 577.75 492.89]/StructParent 1/Subtype/Link>> endobj 497 0 obj <>/Dest[495 0 R/XYZ 33 319 0]/F 4/Rect[43.75 462.75 577.75 475.32]/StructParent 2/Subtype/Link>> endobj 498 0 obj <>/Dest[6 0 R/XYZ 33 664 0]/F 4/Rect[43.75 450.18 577.75 462.75]/StructParent 3/Subtype/Link>> endobj 499 0 obj <>/Dest[8 0 R/XYZ 33 272 0]/F 4/Rect[43.75 437.61 577.75 450.18]/StructParent 4/Subtype/Link>> endobj 500 0 obj <>/Dest[8 0 R/XYZ 33 150 0]/F 4/Rect[43.75 425.04 577.75 437.61]/StructParent 5/Subtype/Link>> endobj 501 0 obj <>/Dest[10 0 R/XYZ 33 329 0]/F 4/Rect[43.75 412.47 577.75 425.04]/StructParent 6/Subtype/Link>> endobj 502 0 obj <>/Dest[12 0 R/XYZ 33 651 0]/F 4/Rect[43.75 399.9 577.75 412.47]/StructParent 7/Subtype/Link>> endobj 503 0 obj <>/Dest[12 0 R/XYZ 33 392 0]/F 4/Rect[43.75 387.33 577.75 399.9]/StructParent 8/Subtype/Link>> endobj 504 0 obj <>/Dest[12 0 R/XYZ 33 146 0]/F 4/Rect[43.75 374.76 577.75 387.33]/StructParent 9/Subtype/Link>> endobj 505 0 obj <>/Dest[16 0 R/XYZ 33 676 0]/F 4/Rect[43.75 362.19 577.75 374.76]/StructParent 10/Subtype/Link>> endobj 506 0 obj <>/Dest[16 0 R/XYZ 33 379 0]/F 4/Rect[43.75 349.61 577.75 362.19]/StructParent 11/Subtype/Link>> endobj 507 0 obj <>/Dest[16 0 R/XYZ 33 232 0]/F 4/Rect[43.75 337.04 577.75 349.61]/StructParent 12/Subtype/Link>> endobj 508 0 obj <> endobj 509 0 obj <> endobj 510 0 obj <> endobj 511 0 obj <> endobj 512 0 obj <> endobj 513 0 obj <> endobj 514 0 obj <> endobj 515 0 obj <> endobj 516 0 obj [200 0 0 0 0 0 0 0 303 303 0 0 249 311 249 0 497 497 497 497 497 497 497 497 497 497 249 249 0 0 0 0 0 544 588 571 615 527 494 617 652 263 0 0 486 727 647 664 566 664 569 534 536 0 515 786 0 476 0 0 0 0 0 0 0 504 553 456 555 496 292 504 544 246 247 495 255 829 547 542 555 555 347 419 338 544 467 718 446 467 425 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 744] endobj 517 0 obj <> endobj 518 0 obj [200 0 0 0 0 0 0 300 344 344 0 0 300 332 300 339 528 528 528 0 0 0 0 0 528 0 0 0 0 0 0 463 0 573 605 582 635 0 524 0 674 301 0 0 518 762 665 684 596 0 613 556 556 665 556 813 0 0 0 344 0 344 0 0 0 527 573 467 573 518 341 534 571 276 278 548 286 857 572 555 573 573 398 443 383 568 523 776 514 521 460] endobj 519 0 obj [540 0 R] endobj 520 0 obj <>stream it is up to the processor t assess the appraisal report and to make sure that the property is acceptable collateral for the mortgage loan. Yes. No. 142 0 obj <>/Filter/FlateDecode/ID[<0FA4DFB1B1FA1A41B520293D74AA177E>]/Index[124 43]/Info 123 0 R/Length 95/Prev 185843/Root 125 0 R/Size 167/Type/XRef/W[1 3 1]>>stream Section I.B. A lender can transfer it to another lender, but they are not obligated to. Can I readdress a report, or change the name of the client, but otherwise give the same report to another client? In the event the mortgage lender does not like the appraisal, a second appraisal or field review will be required. &xBCY3}Ng\z1n7_A@| ejL Every time an addition is made to the list of intended users, our liability grows. There are cases where an appraiser needs to go out several miles of the subject property to find a comparable. Once the appraisal is completed, it is turned in to the mortgage lenders appraisal review department. If a lender has reason to believe an appraiser is violating applicable laws or otherwise engaging in unethical conduct, they shall promptly refer the matter to the applicable board or agency in accordance with Section VII. A. All lenders require a residential home appraisal for the subject property. You do not expect anything to go wrong and no delays. I would not continue to give advice on matters you know nothing about. A request to readdress a report should be treated as a request to accept a new assignment involving the same property, as in Q3 above. 28. The Selling Guide requirements for the appraiser remain at their same high level. As stated in the answer to Q28, this process is compliant because the broker is not responsible for selecting, retaining, or providing for payment of compensation to the appraiser. All loans are subject to credit and property .