May Day Brings Changes

A whole new world started May 1 as all lenders scurried to form their new appraisal ordering policies for conventional Fannie Mae and Freddie Mac loans. Even at the last hour, lenders were hoping for a reprieve which never materialized. Here are the new rules, and they WILL affect your buyers:

1. No loan officer will be able to order an appraisal. All appraisal orders will go through the lender.
2. Payments for the appraisal will be paid for by the buyer immediately. No more waiting for the closing date to come around.
3. Appraisal Management Companies (AMC's) will assign appraisers and make up to half the fee charged. (Interesting fact - Some AMC's are owned by Banks)
4. The industry is expecting delays in the appraisal process.
5. A lot of great appraisers are refusing to sign up for this. They see it as the AMC's taking half their fee and having to do twice as much work to make the same money. This leaves the AMC's using appraisers that are new to the business, less-experienced, or maybe not very good. (Good luck with those values!)
6. Borrowers will get a copy of the appraisal sent to them 3 days prior to closing.
7. If you change lenders, you may not be able to use the appraisal and your buyer will have to pay for another one.
8. Although geared towards conventional only right now, some lenders are already saying they will use the same system for FHA loans. (Again - some AMC's are owned by banks).
9. VA buyers will still have appraiser assigned by VA.
10. Your loan officer will have NO contact with the appraiser!
11. The appraiser assigned may come from outside the immediate market area.
12. PLAN NOW! - Consider extending closing dates by 15 days as lenders struggle to work through the growing pains of this new system.