FHA Delays Implementation of Appraiser Independence

image The US Department of Housing and Urban Development announced that the enactment of ML 2009-28, Appraiser Independence will be delayed until February 15, 2010.

ML 09-28 was originally planned to become effective January 1, 2010 and prohibits mortgage brokers and commission-based lender staff from the appraisal process.  It also makes lenders responsible for assuring that the appraiser used for the FHA-insured mortgage is correctly identified in FHA Connection.

The effective date for ML 09-28 will now take effect for all case numbers assigned on or after February 15, 2010.  The extension will provide FHA and lenders additional time to adjust systems to accommodate the changes, said an email from HUD.

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It’s not clear if wholesale reverse mortgage lenders will push back requirements that brokers use Appraisal Management Companies to ensure appraiser independence.

ML 2009-28

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  • I've been doing a fair percentage of inner city loans where the homeowner has a high percentage of equity on a modestly priced home but lives basically on a fixed income. The requirement to pay at the door plus the 10% haircut on the PL plus the counseling fee make this a “no-go” for many of my clients. These are the people who most need the program because they have few alternatives. They are now being left out in the cold. LO's will now be forced to concentrate on more affluent borrowers and purchases.

    • Tim,

      Not at all. It will be even more interesting to get the perspective of someone who was in the industry and decided to go to a different industry. So please do not stop your participation in RMD after 12/31.

      Also please let us know after 12/31/ of course who that good authority is or some information that will allow to see the level of authority that person is. It is interesting that someone is making those kinds of claims whom you consider good authority.

      Best of luck in your future endeavors!!

  • I wish HUD would be this considerate and “give lenders additional time to adjust systems to accomodate changes” when they make changes like the 10% haircut and other changes that really affect the benefits a senior receives from a reverse mortgage.

    • treverse,

      Wow!! Last July there were rumors that some of the largest lenders were preparing their software for a 10% reduction. One rumor in July 2009 stated that B of A was going to implement it in August. I hoping for the last one but laughed when I heard it and as I write it.

      NRMLA was giving all the right signals. HUD was initiating many of them. I guess we will hear some people belly aching about 10/1 for years to come. I just hope you will not be asleep at the switch again. Be prepared, there could a reduction on the principal limits for the next fiscal year as well.

  • Critic,

    I was not complaining about the 10%. Rumors are exactly that “Rumors” All I was asking that when they finally decide to implement the cut it would be nice if they gave us at least a 30 day notice so we can work with customers in the pipeline.

  • Critic,rnrnI was not complaining about the 10%. Rumors are exactly that “Rumors” All I was asking that when they finally decide to implement the cut it would be nice if they gave us at least a 30 day notice so we can work with customers in the pipeline.

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