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Reverse Mortgage Appraisal Compliance Issues

Appraisal Scoop recently posted about the Most Common FHA Appraisal Report Compliance Issues and since I keep hearing about how HUD has plans to crack down on FHA lending compliance I thought I’d pass it along.  I also thought it was important because Anthony Blackburn of Apple Appraisal, Inc. was the one that compiled the list after reviewing a batch of about 25 reverse mortgage appraisals post funding and not a single one complies will all of HUD’s guidelines. Below are just a few of the 17:

  1. Include patios, porches, garages, breezeways and other offsets on the sketch. Failure to state “covered” or “uncovered” to indicate a roof or no roof (such as over a patio).
  2. Have the street scene photo include a portion of the subject site.
  3. Enter a legal description of the property.
  4. To state that the use of the appraisal is to support FHA’s decision to provide mortgage insurance on the real property that is the subject of the appraisal; and intended users include the lender/client and FHA.
  5. Clearly define the boundaries – north, south, east and west – of the subject’s neighborhood. Providing a description of neighborhood boundaries by physical features such as streets, rail lines, other man-made barriers or well defined natural barriers (i.e. rivers, lakes, etc.) details the make up and understanding regarding neighborhood composition.
  6. To adequately and accurately describe current market conditions in the subject’s neighborhood.
  7. List all dimensions of the site beginning with the frontage. If the shape of the site is irregular, show the boundary dimensions (85′ X 150′ X 195′ X 250′)
  8. To see the rest click here.

If you own your own reverse mortgage company or want to make sure your HECMs don’t have any problems being insured make sure you check out the rest of the list here.  Also, Download 41502appdHSGH.pdf.  This appendix to HUD’s 4150.2 has been bookmarked to correspond to the list above.

Thanks to Appraisal Scoop and Anthony Blackburn of Apple Appraisal, Inc. for compiling the list.

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