All right, I was wrong. It wasn’t January 1st, 2010 that the HVCC [Home Valuation Code of Conduct] guidelines for FHA appraisals went into effect. For a little while there my optimism prevailed: I thought the legislation against the HVCC had won the battle. I thought the world was kind after all.
But that isn’t the case.
The lawyers on the side of the common mortgage brokers and real estate appraisers didn’t win. People are once again given the mandate from up high to either change with the times or go hungry.
Here’s the reason:
Appraiser Independence/Mortgagee letter 09-28
As outlined in Mortgagee letter 09-28, effective for all FHA case numbers obtained on 02/15/2010 or later, HUD prohibits any commissioned employee or broker employee from directly ordering an appraisal for an FHA transaction.
To reiterate: Starting February 15th, 2010, FHA appraisals can no longer be ordered directly from appraisers. Starting February 15, 2010, every appraisal must be ordered through an approved national appraisal management company – a middleman – and then assigned randomly to an appraiser.
These middlemen include the likes of Norman Hubbard Appraisal, Nationwide, and Finiti.
There are others, but providing a comprehensive list isn’t the purpose of this post.
The instructions given to mortgage brokers say something along the lines of:
You will order the appraisal, just like you do now but you will order the appraisal from one of these AMCs. You will receive the appraisal, and submit the package with the appraisal, just like you do now. This gives you the most freedom, we can under the mortgagee letter.
I’m not sure who wrote these instructions, but they sure have an original way of using commas.