Important FHA Reporting Items
FHA Appraisers,
The new HUD/FHA 4000.1 manual, in reality a very large BOOK, is said (by FHA) to have everything in it we need to know, and comply with when doing FHA appraisal reports.
We’ve all been amped up about the FHA 4000.1 Handbook changes. It DOES NOT have everything you need to comply with.
FHA has a second BOOK – The Single Family Housing Appraisal Report and Delivery Guide. On page 117, it details how FHA wants prior sales reported for the subject and for COMPARABLES. It is a change to their current procedure – and is specific to FHA only.
The info below is on page 117 of that Guide. You should print it, and save it with your FHA reporting documentation that you keep under your pillow.
FHA Single Family Housing Appraisal Report and Data Delivery Guide.
| Field |
Protocol |
| Analysis of prior sales or transfers of subject and comparable properties |
- Report the date(s) of prior sale(s) or transfer(s) of the subject that occurred within three years of the effective date of the appraisal. (This is already on the 1004, etc. Forms)
- Report the date(s) of prior sale(s) or transfer(s) of each comparable that occurred within three years of the effective date of the appraisal. (FHA Specific Requirement). (This is different than what the form shows.)
- Report prior transfers regardless of conveyance type or consideration amount. If the prior transfer or offering is not relevant to the current transaction or offering, explain why.
- For new construction, include any prior transfers of the land as vacant.
- If the properties are located in a “non-disclosure state,” the appraiser is responsible for reporting the information that is reasonably obtainable.
- Report the analysis of prior sale or transfer history of the subject and comparable properties.
- The appraiser must evaluate the relevancy of prior transfers to the current sale or offering of the comparable.
- The appraiser must describe the difference between recent transfers versus the current sale or offering, and the effect on the appraisal problem.
- The appraiser must provide an analysis of the prior sale or transfer history of the subject property and comparable properties in the report. Simply reporting a transaction is not a sufficient analysis or explanation to the reader.
- FHA recognizes the limitations of form reports and the UAD format. If multiple prior transactions exist for the same property within three years prior to the effective date of the appraisal, the appraiser must analyze and report those prior transactions.
|
| Data Source(s) |
- Enter the data source(s) used for sales and transfer information. Two sources are recommended for researching prior sales and transfers: local MLS and local public records at a minimum.
- Be familiar with the data source(s), i.e., how the data is gathered and how often it is updated, what is the publication date of the data, and what is the effective date of the data.
|
Also, an ‘in-house’ appraiser at an AMC attended a recent FHA 4000.1 manual class, and wrote the following 8 page bullet point list – which you may find to be a handy reference.
Note: I don’t work for this AMC.
Latest posts by Dave Towne
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Case numbers are no longer tied to an appraiser however, to transfer a report, must obtain client permission and
appraiser permission. After report transfer new lender may not
request additional changes and must use existing report. If permission is not obtained or changes are needed, a new report will need to be ordered Case numbers are not and never were tied to an appraiser. Case numbers are tied to an address. No one ever needs an appraiser’s permission to transfer an appraisal. That is something done among mortgagees. H.U.D. is requesting appraisers to begin changing terms from inspect to analyze Actually the term is now “observe” inspect is not analogous to analysis, observe is. New condition noted is that water heaters must now have a temperature relief valve. Always have needed one since VC sheets. Cabinets and appliances must be present and operational and appraiser must in-spect these if they are considered real property How does one operate a cabinet? Appliances do NOT have to be present. The only requirement in a kitchen is a sink. IF appliances are present they must be operational, nothing new about this and we have always been required to test them. The handbook does not require appraiser to inspect, test, or certify anything related to property condition. In the previous section you say that you have to test everything.
Just don’t read the book. Take a class or two and a training session. I’m not doing any FHA work for a couple months until I see how all the changes go. My fee will be $600 or more for FHA work
What a disaster.
Using the MLS and tax records as a DATA source is not sufficient. The appraiser must contact a party to the transaction for VERIFICATION as well. This was stressed in our class since Texas is a non disclosure state. Our MLS has numerous errors in items such as sale price. Yesterday, I found a sale that was listed for $239,000 and closed last week for $66,235 (MLS sale price). The listing agent does not answer or return calls since he is in Atlanta and the buyer’s agent that was referenced in the MLS never had anything to do with the property and did not know about her being referenced as the agent/office.
Rick an MLS that routinely permits erroneous data to be reported without sanctioning the agents reporting it, is thirty years behind the times. They do not do themselves a good service.
We have some out here in Southern California that still allow outright lies to be reported, but they are few and generally far between. MOST mls data provided tends to be accurate with respect to pricing. Most are also responsive to complaints filed about bad data. If your boards are not responsive, how about complaining to the National Association of Realtors? Even if Texas agents don’t care about mls integrity, NAR does.
more and more requirements will only continue to get thrown on the appraisers backs, which means it will take even longer to do any kind of report. as the profession continues to see appraisers quit, it wont be long till it takes FOREVER to get any kind of mortgage loan closed.
things are going to get real ugly, real soon.
I received 15 calls from AMCs in one day. I told them that I stopped doing FHA appraisals on 9/14/15 due to the additional liabilities imposed by the new FHA requirements. I don’t usually deal with AMCs. This leads me to believe that a lot of appraisers have stopped doing FHA work since AMCs are reaching appraisers outside their panel.
My Prediction
The last 10 residential appraisers in the U.S. will boycott AMC orders in the year 2020 and finally take back their careers. This will take place 2 years after FNMA & HUD agree to accept AVM valuations in lieu of certified appraisals.
Thanks to Mr. Towne for his timely article. Mr. Jorgensen is also to be thanked for his analysis and report…though I strongly disagree with his conclusion that it will only take slightly longer in the field and office. Then again, I am assuming the appraiser will actually DO all the things required and not merely boilerplate them away as the Chief Appraiser of one large East Coast Lender is suggesting.
I just received a call from my AMC asking me to draft a letter for fee increases to their lenders. They are raising THEIR fee from $450 to $600 for FHA work (probably); but they have (wrongly) been told by their main lender that under the new TURD (TRID) they are unable to charge for reinspections. I pointed out this is either simply an error in their lenders perceptions or an outright lie. TURD DOES allow for changes to fees based on “changed conditions”, however disreputable lenders wont want to have to go back out and get new GFEs signed by borrowers because that gives them an extra loan cancelation loophole so they’ll act like no changes are allowed.
I’ve told him I probably won’t do FHA work for less than $750; and even then only after I take the course. Maybe I’ll decide then to do it for $650 but never for $450. I have to wonder how many of his regular appraiser panelists will take this on for continued low fees?
By the way does anyone else see the specific contradictions in FHAs instructions as outlined by Mr. Jorgensen? One sentence says we aren’t responsible for certifying as to adequacy for anything, and the very next line it cites HUD verbiage that implies we are! Also, we are NOW placed in the position of 203K appraisers where WE have to estimate every single cost to cure item? Really?
I think the time burden will be an EXTRA two hours for each appraisal. Obviously Mr. Jorgensen disagrees; but no reasonable person truly believes it will only be “slightly” longer. I don’t know about you folks but if one book is over 425 pages and the other is over 117. That is a LOT of detail to be memorized. I can see half an hour to an hour of cross referencing & double checking rules alone for each report. At least initially.
Oh, did I forget that we will also have a NEW form to fill out?
I think RA will probably get his ‘boycott’ finally. Not by choice, but simply by default. I don’t see a great rush to join the ranks as FHA appraisers anymore for the ridiculously low fees being offered. Maybe that will be a good thing.
i just read an article about a developer struggling to develop because of the cost of trades people nowadays. he was saying brick layers are charging $96/hr, and painters are charging $86/hr..
all the education, nonsense and liability we have to deal with, and we are allowing ourselves to get paid WHAT?
excuse me while i go to the store. i need to go pick up a paint roller and a bag of mortar.
the bleeding continues . . . . .
Totally agree with you. It’s insane. In Atlanta there are appraised doing 1004 work for $250 bucks with an REO addendum. It’s so sad
Maryland too. Glad I’m licensed in more than one state. I’d be losing money if I work for that amount. Won’t do it!
At that rate you’ll be able to make more money prepping and painting the front and rear doors of homes than appraisers make in a 10 hour work day (plus you’ll have 6 hours of free time on your hands each day). Hire college kids to do the work and you can vacation every day for the rest of your life while making more than you would have as a 12 hour per day working appraiser.
Sherwin Williams may see a run on paint and rollers tomorrow Bubba.
the painting continues…
I just quoted one of my clients $850 for a 1025 FHA, but lost out to someone who did it for $750, but I don’t even care, I normally get $650 and do not want this increased liability! I’m on the VA panel and they have none of this insanity! (they also allow 10 business days to complete a report) FHA can pound sand. I’ve heard through the grape vine from my clients that FHA is getting turned down all over the country, they simply cannot place orders at the moment. I thank the author for putting this together, but I disagree with his conclusion that things are not so bad, as he works for an AMC, and it is in his interest for appraiser’s to stick their necks out for this BS! Bottom line, HUD lowered FICO scores to 580’s and they want to insure that they do no guarantee loans on CRAPPY properties, by passing the liability along to us. I say NO THANKS
NO THANKS is the correct answer. If enough of us say that maybe then someone will listen to us appraisers. Doubt it!
I don’t want someones interpretation of what the FHA book states (especially from an AMC). Opinions are a dime a dozen. Make sure you take the class and get the book. I’m not doing them anyway so that’s that. Oh yea, I’m tired of this current comparable photos bullcrap. Even if I took the photo last week it’s not current to this appraisal report they say. The current comparable photo is, in my opinion, misleading the reader. Why does Comp 3 have a covered porch when you say it’s open or why are the shutters black, but in the MLS photo they are green. DUH! They say why not include both?? It is still misleading the reader and when I tried doing that they kept sending it back stating no MLS photos. Multiple clients too, not just one.
IF YOU ARE LOOKING FOR ENTERTAINMENT…check out the latest article at AppraisalBuzz.com
They rarely have anything worth reading but they’ve decided throw salt in your wounds over the weekend appraisers. Feel free to blast the author like I did.
got a link to something specific?
http://www.appraisalbuzz.com
It’s the second story that will show in their photo slider.
Title: “The Forming Of An AMC Coalition”.
Getting back on topic…I have been talking to local realtors in my area about the new FHA handbook and they are all saying basically the same thing, the FHA is crazy! You appraisers are not home inspectors! I tell them I couldn’t agree with them more.
PLEASE tell me that the new requirements by FHA will finally get appraisal fees in line with VA appraisal fees!
More work for same pay makes appraisers run away!
I have my running shoes on already……
Nope, only appraisers themselves can achieve that goal. I’m still doing FHA, no problem. I mean, it’s more headache, and I’m raking absolute 450 minimum, often bouncing to 600+ for tougher work, but FHA is still on the menu. I’ve been putting in so much extra effort for so long, the renewed requirements are not very different than what I’ve been doing anyways. Some extra great tips; more photos. Photo main sewer stack couplings, photo ceiling utility room attachments, photo main I bar, photo pylon bases if visible, photo surrounding concrete permiter, photo trims gutters, design features. My goal for FHA is to provide around 100 photos of subject per report. Still would greately appreciate not having to behave like a home inspector though. Appraisers should be furnished an FHA approved home inspection report for every FHA appraisal, sale and refinance. And this should definitely be something much more detailed than the HUD REO 1 page home inspection report, because that is simply too minimal. FNMA and HUD should team up and create a home inspection form and make that a requirement for every unit before an appraiser shows up, and require that to be furnished to the appraiser. I’d bet they spend their time putting in even more UAD lines before accomplishing a more logical goal like increasing the safeguards to borrowers through required home inspections and corrections pre-valuation consideration.
Better start stretching! Don’t want to pull that hammie..lol
Im posting this on my own behalf and no one else’s despite my avatar. I have been getting email for awhile that initially sounded too intriguing to mark as spam. Now I’ve made up my mind about its legitimacy. I HAVE to ask the group though; Am I being too harsh? Copied as received and sent-minus graphics from my end.
“[sent by MFord 9/28/15 n response to below]
Mark,
My previous remarks still stand. Ask each of these “so sure of themselves advocates” whether they wish me to send copies of your sales pitch; comments attributed to them, and my responses to the Texas Appraiser Licensing and Certification Board (TALCB) so they can explain their techniques to them; and / or to The Appraisal Foundation so they are aware of the kinds of marketing and representations that are ostensibly being made by their sponsors.
I listened to the ZAIO hustle of a few years ago; see or hear new software hucksters promoting magical fairy dust driven software that if believed all but eliminates the need for me on a near daily basis, and stopped believing in unicorns And magic lamps long ago.
I’m not interested Mark, but I’ll pass your kind offers on to the appraisal world that I can, on your behalf.
Mike Ford
“From: Mark Sammis msammis@accurityvaluation.com
Sent: Monday, September 28, 2015 10:17 AM
To: Mike Ford; pvidi@atglenderlink.com
Subject: Mike, meet the experts. Mark.
Mike,
If you would like to learn our Houston office’s system please call Mark Verrett: Accurity Acorn Appraisals 832-326-9149
Here is what our Chief Appraiser, Tom Munizzo said about Mark’s system: (Tom is a former NAIFA President and a current member on the Appraisal Foundation Board of Trustees. He just wrote the course on NEW FHA Requirements for NAIFA)
I just spoke with Tom, and I quote:
Technology is changing the industry.
Data Analytics, Cloud based Development.
600 decisions are needed for one appraisal, they don’t all have to be made by the appraiser.
The Commercial Model: Any MAI doesn’t do it all.
6 hour do it yourself appraisals and people that do them are a dying breed, 10 years tops.
Our 1 hour appraisals are more credible and significantly better.
If you would like to go through our process and meet Tom please let me know.
Thanks, Mark.
Mark Sammis
National Sales Manager
Direct: 480-207-2775
Accurity Valuation
8777 E Via De Ventura Dr.
Suite# 385
Scottsdale, AZ 85258
http://www.Accurityvaluation.com
From: Mike Ford mike@mfford.com
Sent: Friday, September 25, 2015 12:19 PM
To: pvidi@atglenderlink.com
Cc: Mark Sammis
Subject: FW: Mike, Webinar Efficiency Workflow. Mark.
Hi Peter,
We spoke about Accurity the other day. I was unsure before, but all doubt has been eliminated now.
See claims. Top producer is doing 74 a month without overtime. That’s 3.7 a day!
I think I’d prefer to keep my license instead.
Best,
Mike
From: Mike Ford mike@mfford.com
Sent: Friday, September 25, 2015 12:13 PM
To: ‘Accurity Valuation’
Subject: RE: Mike, Webinar Efficiency Workflow. Mark.
Hi Mark,
I am not interested in any firm that thinks or claims or pretends to be able to “complete” a USPAP compliant real estate appraisal in one hour.
Think about his or your claim for a minute. An office may do 74 appraisals in a month, but unless you are talking about appraiser assisted AVMs, NO ONE (single appraiser) can do 74 USPAP compliant appraisals in a single month. Tell them for me that I personally am calling them liars if they make that claim. I don’t waste my time listening to liars.
Mike
From: Accurity Valuation msammis@accurityvaluation.com
Sent: Friday, September 25, 2015 8:49 AM
To:mike@mfford.com
Subject: MIke, Webinar Efficiency Workflow. Mark.
MIke,
If you would like to watch the Accurity Webinar you missed this morning on Efficiency Workflow please let me know.
The host was the owner of our Houston office: Accurity Acorn Appraisal
1. He illustrated how to do an appraisal in 1 hour that usually takes 4 hours.
2. His top appraiser completed 74 appraisals last month without working overtime.
3. Members were asking great questions on how to implement his system, you should hear the answers.
Enjoy a 3 minute video from our CEO on our website to learn how Accurity can benefit your business:
http://www.accurityvalution.com. Click on “Why Accurity”
To Your Success with our Support, Mark.
Mark Sammis
National Sales Manager
Accurity Valuation
8777 E Via De Ventura Dr.
Suite# 385
Scottsdale, AZ 85258
Direct: 480-207-2775
http://www.Accurityvaluation.com
If you no longer wish to receive communications from Accurity simply email unsubscribe@AccurityValuation.com
“
End quotes
I usually try hard to avoid personal criticisms, but THIS is (apparently) how our competition is doing lower cost appraisals these days. Unbelievable.
Anyone else on here that does 74 appraisals in a month; or one an hour? Psssst! Tell me how. Promise I wont tell anyone. Well, aside from your state regulators.
Mike, they have offered to let you see a webinar that they say you missed. take them up on the offer and post a link for everyone to see. we all need to see it. 😉
the bleeding continues . . . . .
I have read the The Single Family Housing Appraisal Report and Delivery Guide. You did not give the Date of this Guide Book. Is this the original one issued or has there been an update. The comments about 3 years of transfer history on the comparables was changed to one year, has it now been changed back to 3 years? Who put on this class you attended, was it FHA or some instructor. I took a FHA class from an approved instructor and he admitted that we, the attendees, probably knew more than he did about FHA requirements.
John Pratt