FHA Appraisers Increased Liability with New Requirements
FHA Appraisers Increased Liability & Responsibility with New FHA Requirements
New FHA Requirements Put More Responsibility and More Liability on FHA Appraisers
After reviewing the new HUD handbook, my overall conclusion is that there were not many changes to the overall requirements other than the word MUST. The prior handbook was a list of items that should be completed and verified whereas the updated HUD handbook clearly states that the properties MUST meet these items and the appraiser MUST verify the items in question.
The following is a list of FHA requirements that MUST be completed and verified by the appraiser. It is my opinion that these items will make the appraiser far more liable than the prior HUD handbook.
All verbiage in italics was verbatim from the FHA Handbook 4000.1. The bold and colors are the AAREA editor’s.
Commencement of the Appraisal
a. Information Required before Commencement of Appraisal
The Appraiser must obtain all of the following from the Mortgagee before beginning an appraisal:
- a complete copy of the executed sales contract for the subject, if a purchase transaction;
- the land lease, if applicable;
- surveys or legal descriptions, if available;
- any other legal documents contained in the loan file; and
- a point of contact and contact information for the Mortgagee so that the Appraiser can communicate any noncompliance issues.
Based on the following requirements it is my opinion that the title report, CC&R’s, and a survey will be required prior to the commencement of an Appraisal in order to comply with all of the HUD requirements. Note the line above that the appraiser MUST obtain any legal documents contained in the loan file.
For full story, please visit Arizona Association of Real Estate Appraiser (AAREA).