MY GREEN BLOG

On May 1st a new regulation came into effect on appraisals used for conventional mortgages (those purchased by Freddie Mac or Fannie Mae and < 417K). The new guideline states that appraisals need to be ordered via a 3rd party Appraisal Management Company (AMC). Having come from a company where this was the norm (as was low appraisals, upset borrowers, and poorly paid appraisers) I was content with the fact. But now I am starting to really see how poor this guideline is in practice across the industry. See the following:

A. Appraisers now have no contact with Loan Originators. Sounds good on the face but believe it or not, there are responsible and ethical appraisers and loan originators out there. Appraisal conditions need to be met and running them thru a 3rd party can be exhausting. Things get lost in translation and time is wasted.

B. Speaking of time. Prior to may 1st, I could get an appraisal back within 5 days. Satisfying even the strictest lenders submission policy. Now appraisals are taking 10+ days to even get scheduled. Who knows when the actual report will come in. This factor makes 30 days locks very interesting. Should loans really take longer than 30 days?? NO.

C. The Cost is totally off. For the past 3 to 4 years appraisals have been $450. Now the AMC determines what to charge... and don't think the appraiser get's that full amount. Appraiser's are now beholden to what the AMC determines this appraiser should be paid. I mean the AMC has to make a profit right???? RIGHT???

Though I think more problems will arise. These are the main ones effecting the consumer and I thought you should know. So make sure you schedule those appraisals fast. I have linked an article on the issue from the Seattle Times HERE if you'd like to read more.

Till Next Time,

Jeff

PS. If you agree with this rule being bad for consumers... please SIGN the PETITION at www.hvccpetition.com.