August 2008

FHA ACTIVITY IS BOOMING

The recent passage and presidential signing of the Housing and Economic Recovery Act of 2008 is leading to more FHA loans. The Mortgage Bankers Association reported that the government-insured share of mortgage applications was 29.1% in July 2008. It had been 8.4% in July 2007. Most government-insured loans are FHA loans.

The new law includes a tax credit designed to stimulate the home-buying market. At the same time it gives the FHA more flexibility to provide home loans, including some to people who are facing the possibility of foreclosure.

ELLIOTT® has a network of FHA appraisers throughout the United States who can perform an appraisal with quick turnaround time. If you want ELLIOTT® to assist you in getting an FHA-approved appraisal, call our Client Services Department at (800) 854-5889 or visit us online at www.appraisalsanywhere.com.

APPRAISAL MANAGEMENT COMPANIES BENEFIT LENDERS

Suppose a financial institution issued a home loan and then found out it couldn’t be sold to Fannie Mae or Freddie Mac because the wrong person had ordered the appraisal.

This scenario could very well happen after January 1 of next year when the Home Valuation Code of Conduct (HVCC) takes effect. According to the agreement, which was reached last March between Fannie Mae, Freddie Mac and the New York State Attorney General’s Office, beginning January 1, 2009, if certain people order an appraisal, the loan cannot be sold to the GSEs. People ineligible to order an appraisal under such circumstances include employees of the lender’s loan production staff and mortgage brokers who receive commissions based on the loans affected by the appraisal.

Use of appraisal management companies help keep any organization that needs appraisals in compliance with the upcoming HVCC. This would be a safeguard to prevent the loan from being ineligible to be sold to a GSE.

Management companies can be helpful other ways also. They save time for people searching for appraisals in other parts of the country, especially when certain types of appraisers are needed. They also help keep overhead low and provide a clearer picture of the cost associated with appraisal administration.

ASK MARTITIA

QUESTION:  If an appraiser performs an appraisal for a bank and is asked by a different bank to appraise the same property, is that appraiser allowed by USPAP (Uniform Standards of Professional Appraisal Practice) to accept the second assignment?

MARTITIA: Yes. It would be treated like any other new assignment, with a new agreement. Confidential information pertaining to the first bank that had the property in question appraised must not be included in the appraisal report to the second bank.

Martitia Mortimer, Elliott’s executive vice president, answers appraisal questions on a regular basis in Elliott Real Estate News.

QUOTES

“To invent, you need a good imagination and a pile of junk.”  -- Thomas Edison

“Jealousy is all the fun you think they had.”  -- Erica Jong

“What’s right about America is although we have a mess of problems, we have great capacity, intellect and resources, to do something about them.”  -- Henry Ford II

“Of those who say nothing, few are silent.”  -- Thomas Neill

“Bureaucracy defends the status quo long after the quo has lost its status.”  -- Laurence Peter

“What is defeat? Nothing but education; nothing but the first step to something better.”  -- Wendell Phillips
 

Newsletter Editor: kevin@elliottco.com
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