COVID-19 & Interior Inspections Liabilities
Fannie and Freddie have come out with updated guidelines for appraisals. There is much confusion on what is and what is not required. The below matrix simplified what is allowed by Fannie Mae.
Additional questions and answers can be found on Lender Letter LL-2020-04. The unknown to the appraiser is the ownership of the loan. Appraisers must rely on the lender or amc for that determination. VaCAP wants to remind each and every one of you that regardless of what an amc or lender tells you, it is ultimately your decision on what assignments you accept and which ones you put your signature on. Appraisers always have the final say!
Phil Crawford, Voice of Appraisal has a new show out. It is a long one, (37 minutes) however, VaCAP recommends every appraiser listen. Phil brings up a lot of good information and gives a little behind the scenes glimpse on what is / has been transpiring. Pay attention to his comments on interior inspections and the liability that goes with them. Make your own decisions on the types of assignments you are willing to accept and the fees you will accept. No amc or lender has the right to decide your fees.
No one can predict the fall out from the COVID-19 pandemic, so all the theories circulating about a quick recovery or a long term depression are speculation at this point. Appraisers need to pay attention to the data, talk with agents on current issues they are facing and incorporate relevant information into your analysis and discussion within your reports. Lender buy backs on loans gone bad tend to focus on appraisal deficiencies. Make sure you are including all the necessary / relevant information. Document everything an amc or lender requests as their liability has not even begun to unfold. Plan for the worst and hope for the best.
This maybe a sign of things to come…
JP Morgan Chase will raise minimum requirements for new mortgages. The company, stated beginning Tuesday April 14th, a 700 credit score and 20% down payment or equivalent equity will be required for all new mortgages. From the article, “The changes should help JPMorgan reduce its exposure to borrowers who unexpectedly lose their job, suffer a decline in wages, or whose homes lose value.” See the news article from CNBC here. We anticipate other lenders will follow.