First Time Home Buyers question on FHA Appraisal

Guest

Hi,

I'm *hoping* someone can help with this question because our lender (PHH mortgage/ColdwellBanker) is not helping. Due to the recent regulations, they are not able to determine when an appraisal is done. We have entered into an agreement of sale, had a home inspection and the mortgage process was started/signed and sent back.

The seller believes with all her might that her home is worth $177. She claims to have had an appraisal done in September to "remove PMI" from her mortgage but turned around and put it on the market for $177. Comps in the area suggest that no house sold for more than $171 in the last 90 days. There is water in the crawl space which needs to be repaired but she fails to acknowledge this.

Our closing *depends* on this FHA appraisal and what I'm concerned about is that the appraisal might take too long. Do you know what the turnaround time for an FHA appraisal is now that the crunch for the tax credit has begun? Any comments or suggestions?

Thank you in advance! I appreciate any response you can provide.

savior70 · Posted: Wed Oct 28, 2009 5:42 am Post subject:

Hi,

Your loan amount, that you will be approved for depends on the appraised value of the property. For FHA loans, you will require an appraisal by an FHA approved licensed appraiser. The time taken to complete the FHA appraisal should not take too much time. The credit crunch will not affect the time taken to complete an FHA appraisal. If you are not satisfied with the result of the appraisal, you can ask for a re-appraisal. You can also engage your own appraiser to determine if the property is at all worth the purchase price.

loanday123 · Joined: 28 Oct 2009 Posts: 16 3.83 Dollars($)

FHA loans usually take one month PLUS to close. Underwriters at the banks are so booked up right now. You just have to play the waiting game like everyone else. There are so many people refinancing right now that the banks don't have enough staff. Be patient.

gmakerley · Posted: Wed Oct 28, 2009 8:16 am Post subject:

is it that you're trying to use the appraisal that was recently done for the seller? that's kind of what i glean from your post. if that's the case, there are plentiful records to determine when and who did that appraisal. as for the other issues you noted, i'm not clear on what you're driving at...are you trying to get a price reduction?

Guest

We are not able to use the last appraisal, according to PHH mortgage. The lender, our real estate agent and ourselves have asked for a copy of this appraisal from the seller and have NEVER gotten it or a response. It's a very shady situation. We put in a bid for $179 with a $4k assist from the seller. We need it appraised at that. If it's under, I have a feeling the seller would NOT negotiate at all on price. I'd like to walk away ASAP if it's going to appraise for under that.

raymond · Posted: Wed Oct 28, 2009 9:21 am Post subject:

>>Do you know what the turnaround time for an FHA appraisal

I only do FHA-insured mortgages and the turn around time is dependent on the Appraiser. I requested a "rush" two weeks ago and the Appraiser got to the property that day and turned the Appraisal in the following day. Without a "rush" I can usually expect the Appraisal to be turned in 3-5 days after the Appraiser visited the property.

When the Appraiser visits the property is dependent upon when a homeowner is available. I haven't had any problems in this area and the Appraisers have been able to get to the properties as soon as the homeowner says they're available. I haven't encountered any time lags whatsoever with FHA Appraisals, in any part of the Country.

And a suggestion ... make sure your Loan Officer lets the Appraiser know about the water in the crawl space. It'll be noted in the Appraisal and the homeowner will have to acknowledge and repair it. And it'd be a good idea to get a mold inspection, depending upon how long the water has been there. All the Appraiser has to do is mention the word "mold" in the Appraisal, and the Underwriter will condition for a mold inspection.

gmakerley · Posted: Wed Oct 28, 2009 10:16 am Post subject:

frankly, i don't see any reason for the seller to provide you with that old appraisal report. it was done for the seller, not for any other purposes. what the value was then could differ from what value is now. as raymond pointed out, timing is not really an issue. if an appraiser is available and can schedule within a reasonable timeframe with an owner, there's no reason that the compilation of the report would take an extracted period of time.

jveenstra · Posted: Wed Oct 28, 2009 10:33 am Post subject: FHA Appraisal

The seller had an appraisal done to remove PMI. That would indicate the appraisal was done for a conventional mortgage, not an FHA mortgage, so, the sellers appraisal could not be used for this FHA purchase.

Recent regulations require that appraisals for Fannie Mae and Freddie Mac loans must be ordered randomly--the loan originator can have no contact with the appraiser and can not order the appraisal from an appraiser that he chooses. This is not yet a requirement for FHA appraisals, however, many lenders no doubt already use the same process for FHA appraisals. It sounds like the appraisal was orered through this random process.

While the selection of the appraiser is random, there is someone who should be able to check on the status of an appraisal. It sounds like PHH is saying they have no way of checking. They are at the mercy of the court as far as who the appraiser is, but, someone should be able to check on the status.

At the present time, must close by November 30 to be eligible for the first time buyer tax credit. That time frame seems to be in jeapardy. With a little luck, that date may be extended, but, not guaranteed.

If the appraised value is too low sounds like you will not buy this house anyway and if the value is low you can refuse to buy it.

That leaves the problem--when will the appraisal be done and when will everyone know what is to happen. No one can tell you when the appraisal will be done. Each of us knows we typically get appraisals back in 3 days to a couple weeks, but, we also know stories of a lot longer. Not pleasant, but all you can do is call the PHH contact you have and try to get someone there to find out for you.

Guest

Thank you for all your responses!!! You all have been such a big help to me and words can not express my gratitude. I just received word from the listing agent that the appraisal is being done tomorrow, so it should not be long before we get an answer. I will definitely advise our lender (if they don't already know) of the mold issue! Thank you Thank you!

gmakerley · Posted: Wed Oct 28, 2009 10:49 am Post subject:

i'm glad to see that this is moving quickly again. i wish you well, holla.

Guest

I have a contract on my home. Buyer is FHA. Appriasal from FHA came in $60,000. lower than what the same bank appriased it for 8 months ago. Is this too much of a difference in appraisal? Do I have have a right as homeowner to order a second FHA appriasal (I'll pay for it), and should I?

gmakerley · Posted: Sun Apr 04, 2010 1:10 pm Post subject:

gaby, depending on where you live it's entirely possible that values have dropped that much. frankly, though, even as i say that, i think that the value on that previous appraisal may have been charitable and shouldn't have approached that number. you say "same bank" but is it the same appraiser? that's the key, as the bank only hires someone to do the job.

you didn't mention whether or not you're working with a real estate agent. if you are, you'll have an easier time getting a second viewpoint on the value. you and the bank cannot negotiate this; that would be between your buyer and the bank. as a seller, you're pretty much stuck with what occurs unless you have a realtor to look out for you.

also, if your buyer is dispirited because of the low appraised value, you may just lose that sale. if a buyer wants your home sufficiently, he can request a second appraisal from his lender, of course.

it's not an easy situation to crack, frankly.

Guest

We are selling a home that is in probate to my sister. We both wanted a good appraisal for it ..though she is going FHA and low down; nest egg for new furishings in home. The fha appraisal came in $13,000. lower than the sellers appraisal done 3 weeks earlier which we werent happy about either (these appraisers from out of town ). Comps used where outrageous....(23 year older homes) (856 sq. ft. home compared to a 1,220 sq. ft home)( distressed homes that have forclosed) - all comparables used except one were of lower footage . Appraiser will not give or reconsider. A home sold 3 blocks away ...extremely comparable ..(46 ft difference in sq.ft)(same heating and cooling) etc . rest of criteria extreme close sold 2 months ago ...sold for $60,000. more than what she appraised our house for. Comparables were sent to her from broker to lender ...she refused to use any of them. Any thing we can do?

Thanks ~ AJ

gmakerley · Posted: Tue Jul 27, 2010 2:09 pm Post subject:

My thought is that your lender ought to step up to the plate and insist on other comparables being used, particularly if you can provide them. Of course, you can always pay for another appraisal. As for equating the work done with what was done for the seller...forget that - it won't fly with anyone. What has your lender had to say about this low value appraisal?

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