FHA delays new appraisal rules

The Federal Housing Administration has pushed back to Feb. 15 implementation of new rules for appraisals that were originally scheduled to take effect on Jan. 1, in order to give FHA and lenders more time to adjust systems to accommodate the changes.

The new rules are intended to bring FHA appraisal policies into "full alignment" with rules employed by Fannie Mae and Freddie Mac since May 1 to protect appraisers from coercion, the Department of Housing and Urban Development (HUD) said in announcing the changes in September.

Real estate industry groups have complained that the new rules governing appraisals for Fannie and Freddie, the Home Valuation Code of Conduct, have derailed sales because they have shifted work to appraisal management companies, some of which have allegedly employed inexperienced appraisers.

FHA's new appraisal guidelines may not have the same effect, because they include "geographic competency" requirements for appraisers, and allow lenders to pay separate, market-based fees to both appraisers and appraisal management companies (see story).

In a bulletin e-mailed to lenders Tuesday, HUD said implementation of two "mortgagee letters" governing appraisals, ML 2009-28 and ML 2009-51, has been pushed back to Feb. 15.

Regulators say they continue to expect that lenders will begin using new loan disclosure forms on Jan. 1, in order to comply with new Real Estate Settlement Procedures Act (RESPA) rules.

HUD has promised to "exercise restraint" in enforcing RESPA rule changes during the first four months of 2010 for those who can demonstrate they are making "a good faith effort" to comply (see story).

That does not mean it's OK to continue using the old good faith estimate (GFE) and HUD-1 settlement statement forms, Federal Housing Commissioner David Stevens said in a Dec. 17 letter. ...CONTINUED

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.