COVID-19 Temporary Appraisal Guidelines
Fannie and Freddie are giving preference to desktop appraisals over exterior appraisals, which quite frankly, is completely backwards from what most appraisers believe to be a more reliable appraisal. HUD and the Veterans Administration, on the other hand prefer exterior appraisals…
Ok appraisers let us be blunt about the COVID-19 Virus. It is serious and no one should be ignoring all the warnings. We could learn a thing or two from other countries that have experienced the outbreak prior to us. Fannie, Freddie, HUD and VA have all altered their appraisal requirements as a result of the rapid spread of the virus. Fannie and Freddie are giving preference to desktop appraisals over exterior appraisals, which quite frankly, is completely backwards from what most appraisers believe to be a more reliable appraisal. HUD and the Veterans Administration, on the other hand prefer exterior appraisals and will accept a desktop appraisal under limited circumstances. These temporary changes all give the appraiser good alternatives to interior inspections. Make sure the certifications and scope of work are modified to protect yourself. Each entity has provided additional language to use within your report. Make sure the verbiage on the certification and scope of work match what you actually did. Lenders have been slow to adopt these temporary changes and it is causing some stress and confusion to many. The bottom line is that each appraiser needs to decide for themselves the level of comfort with each of these products. Remember it is your license, not the amc or lender. Make your own decisions that are right for you and your family.
See Fannie Mae temporary guidelines here.
See Freddie Mac temporary guidelines here.
See HUD / FHA / USDA temporary guidelines here.
See Veteran Administration temporary guidelines here.
There is hope and encouragement.
We have all heard the saying every cloud has a silver lining. The COVID-19 Virus is no exception. As a result of the current state of affairs, appraisers are beginning to see more unity. There are numerous discussions within the appraisal groups on social media platforms on how appraisers are handling situations, but perhaps the strongest unity is coming as a surprise to most.
The American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, the Appraisal Institute, the Massachusetts Board of Real Estate Appraisers and the National Association of Realtors have joined together informing government entities that real estate appraisal is an essential service. This is in direct response to some states ordering stay at home or shelter in place orders barring appraisers from working. See the combined efforts below.
Additionally, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, the Massachusetts Board of Real Estate Appraiser, the International Association of Assessing Officers and the Appraisal Institute are hosting a free webinar on the Covid -19 Latest Developments and Efforts for Appraiser on March 31st. To learn more and to register, click here.
VaCAP encourages each and every one of you to support your local, state, national and international appraiser organizations. A united front by all appraisers is a strong step forward!
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Fannie and Freddie are NOT giving preference to desktop appraisals over exterior appraisals. If you read the updated Frequently Asked Questions (Mar.26, 2020, page 3-6), they clearly state that the drive-by appraisals are for refi-transactions (because they need some current photos) and the desktop-appraisals are for purchases (because recent photos might be in the MLS).
They also state that an extraordinary assumption is not required, when FHA says that one might be required. I wish these government goofballs would all get it together already. What a mess. When these properties end up as REO’s these same outfits will be hand in hand with the state appraisal boards when they start coming after the appraisers. I can see it now “you have 27 USPAP violations” . . . . blah blah blah.
VA is the only one that got it right. It is up to the Appraiser to decide! “We trust our Appraisers to do the right thing”. The others have so many stips no one is even trying. “We understand if you don’t want to go in and it won’t be held against you, but we will have to find someone who will”. So I say “It is a medical professional’s house and they are afraid to even go home”. Response “Well this lender insists on a full”. Now understand I do not want desktops and drivebys to be the norm!! I would like to use common sense. At this point we just ask everyone to clean, open everything and leave.
I had a request yesterday on a 1004 interior. I asked if it could be done as a DB or DT, they said no because the borrower was dong a cash out refi. I told them that I live in a state with a “stay at home order” and that I also have Asthma, so I will not be going into people’s homes during the C-19 virus. I declined the request. I am sure that they just sent it to another appraiser. The only one who is looking out for me, is me. I will value my life over a check any day.
Great commentary. The game is same as it ever was. What’s the projected climate of review in the future? As the question is never answerable, it may be a wiser choice to disregard the variety providers advice and clever widgets which accelerate production and analysis. Regardless of what adjustments are made on the production side, this is not going to alter the existing processes on the recall and forensic side.
It is up to the appraiser to determine if they want to continue working. No one can make us take orders, as we are all independent contractors. The government is trying to keep some wheels in motion, but that will be at the safety and expense of those willing to work in this current environment. As this time I am not taking orders, but that is a personal decision.
Lenders were slow to react because they had to wait for the investors to speak. Lenders cannot arbitrarily accept 2055s they cannot contractually sell. Investors FINALLY came out with guidance.
The monopoly money crew spoke, the clouds broke, and the waters parted.
I don’t think so.
It is clear to me that lenders and/or investors, couldn’t care less if appraisers “die in the trenches” while doing appraisals with interior inspections. Lots of orders come in that require interior inspections and I’ve declined all of them. I’ve only had one order for a 2055 Exterior.
Only when most all appraisers refuse to do interior inspections, will lenders start issuing orders for 2055’s and Desktops. There may be few appraisers standing by the time that happens.
Crafting updated sow is important but it’s not the whole picture.
https://www.zerohedge.com/markets/mortgage-massacre-latest-casualty-10-billion-m-reit-mfa-cant-meet-margin-calls
As Bloomberg explains, investors in MBS are suddenly facing the perfect storm of collapsing asset values, a frozen market and panicked client redemptions as “holders of mortgage-backed securities are fielding redemption requests from clients, margin calls from jittery counterparties and drops in their valuations, forcing the funds to solicit offers on billions in assets in emergency sales over the weekend”
Interested to see how the lenders will handle the “appraisal waiver” once they see the rapid decline in the market as most predict. I am glad that they view our work now as “essential” because as of two weeks ago, our work was viewed more as a hindrance.
I wonder how those AVM’s are working for lenders now that we are in a declining market! Zillow better throw their Zestimate out of the window.
that is EXACTLY what I was thinking too.
Wuhan Doctor Ai Fen supposedly disappeared. She broke her silence and blew the whistle on the Communist Regime saying that: The authorities banned us from warning the public and the world about the virus.
CHINA INFECTED THE WORLD!
https://mises.org/
https://www.zerohedge.com/
Too much to cover. Read for yourself.
Where do our liberties come from? They don’t come from government.
This virus started in China, and instead of China warning the world, they let it spread like wildfire and now when the world is desperate, they’re profiting from it.
https://www.reddit.com/r/China/
Who could keep up?