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The Federal Housing Administration's (FHA's) guidelines, meanwhile, are more definitive. They stipulate that a new lender must accept the original appraisal in the old lender's name. If an FHA borrower switches lenders, the first lender must transfer the case to the second lender.
With one set of guidelines allowing transfers and another requiring acceptance, things can get confusing. Based on market trends, it seems there's an equal chance that lenders will release and accept appraisals.
Know lenders' policies
Mortgage brokers can improve the likelihood that appraisal transfers will occur smoothly in a few ways. First, find out the policy for appraisal transfers for each lender with which you work and favor lenders with a history of allowing appraisal portability.
It's imperative to learn the internal policies of each lender with which you do business. This can help protect borrowers from potential snafus or additional appraisal costs, which can be critical when moving deals for the sake of better rates or terms -- or both.
After initiating an appraisal transfer, stay involved in each stage of the process to make sure it proceeds smoothly and quickly. Stay in touch with both lenders and with the AMC. Ask questions, get answers and keep borrowers in the loop.
For loans being sold to Fannie Mae or Freddie Mac, get an HVCC certificate from the AMC. This will provide the new lender with proof of appraisal-specific HVCC compliance. This also can help convince new lenders to accept appraisal transfers.
In addition, brokers should know that transferred appraisals must be in the form of a first-generation copy of the original appraisal and not a second-generation PDF copy. After a transfer is approved, the AMC must send the appraisal directly to the new lender. It should never be in the hands of the broker, which would be an inarguable violation of HVCC rules.
Although mortgage brokers are barred from most parts of the appraisal process, they can play a critical role in preventing problems with appraisal transfers. By staying abreast of appraisal rules and lenders' reputations -- and by communicating early and often with all parties involved -- brokers can more easily move a client's loan upon finding a better deal.
Brian Coester is CEO of Coester Appraisal Group, an appraisal-management company that specializes in providing appraisals that comply with Collateral Data Delivery, Home Valuation Code of Conduct and Federal Housing Administration appraisal guidelines.
Coester Appraisal Group has access to every licensed appraiser in the country, handles appraisals nationwide and offers a 100-percent guarantee that appraisals are done correctly. Coester has been with Coester Appraisal Group for eight years. Reach him at (888) 485-1999 or email@example.com.
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