New Appraisal Rule

As of May 1^st 2009, appraisals have to be ordered directly through the lender, we as a broker cannot order the appraisal on the brokers name any longer.  Lenders now charge more for the appraisals, and at the same time they pay less to the appraisal companies, it’s a bit sad for the appraisers have to receive about 175 less while the consumers have pay  about 100 more.  As for example some of the lenders charge 475 for the appraisal,  the lender only pays the appraisal company 220,  where before appraisals charged 375, and now and the lender keeps the 255  difference (475 -220) which they say its used for management expense.  Well, nothing we can do about it, just cast our vote against the rule, but it’s a rule that got into effect because lots of previous appraisals that were being asked to go higher than the value which was illegal, such was the case with Washington Mutual, is what they were doing, so that’s why they got into trouble later for over doing the higher appraised value, and as we now know they are gone. 

So therefore this new rule was implemented to help avoid appraisal companies over appraising the value, however what this means is, if the lender does not accept the appraisal, some lenders will not accept the current appraisal done with the other lender, so it will have to be reorder on certain cases.  So it could be very costly just to try and do a refinance, if the appraisal is not accepted by that lender, and if we want to switch to a different lender, then it will have to be re-ordered at another 475 price. 

This rule is just into effect this month, so there have been lots of changes and adjustments by the lenders and brokers.    We are a bit tired of all the rules and changes because it causes a lot of slowness in adapting.  We hope that all the new rules in place will finally make the market return to in place.  Of course now we know, it is very hard to qualify for a loan, and now it’s become slightly more expensive for the consumer ’about $100 more’ to do loans because of this new rule.

Tags: Loan_Updates

Updated on Saturday, May 30 2009 04:23 PM PDT

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