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									 Fall 2010
 Issue 1
                                FHA APPRAISER
                         Welcome to the Federal Housing Administration Appraiser Roster Newsletter. We hope you
                         will find it informative. With over 52,000 approved appraisers, the FHA Appraiser Roster
                         enables FHA lenders to select qualified and knowledgeable appraisers in these challenging
                         times. This newsletter will allow appraisers and industry partners to see how topical issues will
                         affect their FHA business as well as focus on fundamentals of FHA requirements.

In This Issue:
                         Dodd-Frank Wall Street Reform and Consumer
• Welcome                Protection Act
• 2010 Dodd-
  Frank Bill             As most appraisers are           about reasonable and              analyzed VA appraisal
                         aware, the Dodd-Frank            customary fees as well as         fees in terms of meeting
• FHA Spotlight –        Bill, signed into law on         appraiser independence            the “reasonable and
                         July 21, 2010, requires          can read the Interim Final        customary fee” test. FHA
  elements of
                         lenders to pay                   Rule, which will be               expects that lenders will
                         “reasonable and                  published in the Federal          comply with the Dodd-
• Findings from          customary” fees for              Register for public               Frank Bill and reminds
  an actual FHA          appraisal services. The          comment, by the Federal           readers that it has already
  appraisal review       Bill states that reasonable      Reserve Board. The                implemented a policy that
                         and customary fees may           Interim Rule is available at      appraisers be paid
                         be based on third party          http://www.federalreserve.
                                                          U                                 reasonable and customary
                         sources such as                  gov/newsevents/press/bcr          fees. (See Mortgagee
                         government fee                   eg/bcreg20101018a1.pdf.      U    Letter 2009-28 at
                         schedules, academic              The Appraisal Institute, in

                         studies and independent          a report dated 10/5/2010          /adm/hudclips/index.cfm).
Staying Informed:        surveys. Appraisers              and available from their
                         seeking more information         web site,
 - Keeping your Roster

 appraiser Info up to    FHA Spotlight – Primary Elements of Minimum
 date                    Property Requirements (MPR)
 - Get Answers from

 FHA                     Over the years, the              three elements relate to          a property or simply a
                         meaning and importance           and impact one another.           missing handrail or other
                         of the three primary                                               hazards affecting the
                                                          Safety refers to the health,
                         elements of MPR have                                               health and well-being of
                                                          habitability and sanitary
                         become confused by the                                             the occupants.
                                                          condition of a property.
                         reference to safe, sound
                                                          Systems within the                Soundness relates to the
                         and secure. However, the
                                                          dwelling contribute to the        structure and structural
                         primary elements of
                                                          safety of the home.               components of the
                         minimum property
                                                          Deficiencies or a lack of         dwelling. They include not
                         requirements for FHA
                                                          functioning components of         only the foundation but
                         eligible properties are
                                                          plumbing, electrical or           also other elements such
                         correctly referred to as,
                                                          heating and cooling               as floor, wall and roof
                         safety, soundness and
                                                          systems may create                framing systems. Decks,
                         security. The three S’s of
                                                          hazards that could be             porches and patios may
                         property eligibility, as they
                                                          considered health and             also pose structural issues
                         are often referred, are
                                                          safety issues. Safety
                         important for appraisers to
                                                          hazards can also be the
                         keep in mind when
                                                          result of issues having to
                         performing property
                                                          do with the soundness of
                         inspections. Often the

                       FHA Spotlight – Primary Elements of MPR, cont.
                       due to improper              intrusion, etc. However,      influences may also
“                      construction or              security refers to risk to    impact the ability of the
“Security is the MPR   deteriorated condition.      the Insurance Fund in         property to serve as
element that creates   Site conditions may also     terms of a property’s         collateral for FHA-insured
the most confusion     impact soundness.            ability to serve as           financing.
among appraisers.”                                  collateral for the FHA-
                       Security is the MPR                                        Appraisers must be
                                                    insured loan.
                       element that creates the                                   diligent in considering
                                                    Marketability is one of the
                       most confusion among                                       these three important
                                                    things to be considered
                       appraisers. The misused                                    elements of FHA’s MPRs
                                                    under the element of
                       mantra, safe, sound and                                    during the inspection and
                                                    security. Marketability
                       secure has contributed to                                  appraisal process and be
                                                    issues can include
                       the notion that secure                                     sure to condition the
                                                    deficiencies related to the
                       means that the property is                                 appraisal appropriately
                                                    other two MPR elements
                       sheltered from weather                                     when deficiencies exist.
                                                    having an impact on value
                       and/or protected from
                                                    or marketability. External

                       Findings from an actual FHA appraisal review
                       As FHA Roster appraisers     the list price, which the     the comparable sale.
                       know (see Mortgagee          appraiser failed to report
                                                                                  Mortgagee Letter 2005-02
                       Letter 2009-41 at            and analyze. According to
                                                                                  requires appraisers to
                the listing agent, the
                                                                                  make market-based

                       /adm/hudclips/letters/mort   increase in sales price
                                                                                  adjustments to the
                       gagee/2009ml.cfm), FHA       was due to seller paid
                                                                                  comparable sales for any

                       reviews appraisals           concessions added to the
                                                                                  concession that affected
                       performed by roster          contract price. The
                                                                                  the sale price.
                       appraisers to ensure         appraiser failed to
                       credibility, accuracy and    disclose the concessions,     The review findings
                       compliance with FHA          research and analyze          resulted in the FHA
                       standards and appraisal      market reaction to the        sanctioning the roster
                       reporting requirements. In   concessions and               appraiser with Education.
                       review of FHA Case No.       comment as to the lack of
                       xxx-xxxxxxx, comparable      an adjustment for
                       No. 1 sold for $3,500 over   financing concessions to

Keeping your Roster appraiser info up to date
If your contact information         appraisers to keep their      While you are visiting the
has changed, FHA Roster             information current. FHA      FHA Roster Appraiser web
appraisers must visit the           reminds appraisers that       page be sure to check out
FHA Roster Appraiser web            FNMA/Freddie Mac              new policy
page at                             Appraisal reporting forms     announcements and
                                    require appraisers to input   clarifications (FAQs).
                                    current contact information

sers and click on
                                    when completing an

Appraiser, then the
                                    appraisal report. Inputs
“Update your information.
                                    such as “address and
You will be able to update
                                    telephone number on file”
your contact information in
                                    are not acceptable. A
FHA Connection to ensure
                                    current address (both
your appraisal credentials
                                    mailing and email) and a
are current. Failure to
                                    current telephone number
keep your information
                                    are required. FHA may
updated may result in a
                                    issue Notice of Deficiency
loss of appraisal
                                    actions against Roster
assignments. FHA is
                                    appraisers who fail to
dependent upon current
contact information and
relies upon

        Get Answers from FHA
    Sometimes appraisers are    For questions, send an
    stumped and looking for     email to
    answers as to how to     U

    handle an issue. Get
                                Be sure to include your
    answers to your questions
                                contact information.
    from FHA’s Knowledge
    Base at                     If you need help with the
    U                           FHA Appraiser Roster,
    AFAQ      U                 send your questions or
                                issue to
    There are over 1,300
    FAQs in the Knowledge
                                U                             U

    Base, and you can search    Finally, if you are unable
    by category or keyword.     to get the answer you
    Appraisers can also get     need, contact the FHA
    valuable information from   Resource Center at 1-
    the FHA Resource Center     800-225-5342.
    Bulletin Board.

For Valuable Consideration


3.    shade loving landscaping plant
7.    these are similar to the subject
8.    Form for 2-4 appraisal, establishes viablility (abbr.)
9.    can, CFL or LED
13.   exit
15.   condition or median
17.   FHA is a division of this organization
18.   roof slope
19.   size of a house (abbr.)
21.   possible conditions of value
22.   _____, current, clone
23.   factor in calculating
25.   pertaining to a river bank or other body of water
27.   protects from moisture (2 words)
30.   established through agreement
31.   Borrowers' ____, important criteria for HECM loans
33.   appraisal designation
34.   distance from subject to comparable
35.   HVAC outlet
38.   land parcels
39.   system where sales reside
41.   entrance
43.   type of shade tree
44.   dollar values in comparable sales grid
45.   tenants are these
47.   measure for 2-4 unit property (abbr.)
48.   form required for some income property appraisals (2 Words)
49.   attic access

1.    ___ lot, HOA amenity
2.    wheelhouse (2 words)
4.    Roof peak
5.    regulatory exclusion from the bundle of rights
6.    Distant,______,Dissimilar
10.   interval in a data set
11.   not gla
12.   mortgage insurer
14.   vertical part of a stair step
16.   principle that the lowest price of similar goods attacts the greatest demand
20.   3 most important in real estate
24.   lenders are these
26.   real estate tax based on property value (2 words)
28.   balanced analysis technique
29.   some dining areas
30.   sidewalk material
32.   borrowers are these
36.   two or more parcels combined
37.   most probable amount derived from leased comps (2 words)
40.   Landlords are these
42.   business as usual
46.   floor or foundation of concrete

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