December 2009

Appraisal Changes

I know that I’m behind in posting anything in my blog, but I have been quite busy setting up a new social networking site for people who love nature, native plants and wildness.   Needless to say my time has been taken up with that but I am still very much involved in the Reverse loan industry.

In the last few months, there have been several changes.   One was to reduce the amount of money a senior could receive from a Reverse loan by 10%.   The cut off before this went into effect was October 1st. and many people missed it and had to settle for a lessor amount on their loan.

The other issue will go into effect on January 1st.   Brokers and Lenders will no longer be allowed to order appraisals directly from the appraisers that they have had relationships with over the years.   Earlier in the year, the Home Valuation Code of Conduct was foisted onto the lending industry and all traditional loans with the exception of Reverse loans, had to order their appraisals through a management company.

The result has been chaos and in many cases resulted in worthless appraisals, killing purchase transactions and hurting the Real Estate industry that has already been hurt by the economy.   Now this method of ordering appraisals will be applied to the Reverse mortgage industry as well and I’m expecting that there will be problems with it.

I’m rushing to complete a loan today and order my HUD case number, so that we can mover forward and order his appraisal before the deadline.  If my appraiser cannot do his inspection by this weekend or the beginning of the following week, it may be too late for my client.

In speaking with one of my processors the other day, she mentioned to me that if a senior is in foreclosure and an appraisal is done through one of the AMC’s (appraisal management company), sometimes the appraisal is too low and a Reverse loan cannot be completed and seniors are losing their homes because of this appraisal process.

I am wondering how using HVCC is going to impact the senior community.  Its becoming more and more difficult to originate the loan and seniors are paying the price.

And if you are interested in my social networking site about nature, please check it out and remember it is in beta form.   There are some things that still need to be completed before it is launched.   It’s such a nice place to “visit” and escape from daily life.

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Reverse Loan Consultant