Answers to Compliance Questions from Our Webinar “Evaluating Your Appraisal”
We want to thank everyone who attended our webinar “Evaluating Your Appraisal.” We had many excellent questions during the webinar, and we were able to answer several on air. For multiple questions that weren’t answered during the webinar, you can find the answers below. You can also download the slides below.
Our experts look forward to serving all your mortgage compliance needs.
Question 1 – Is it true that if we determine that an appraisal is unacceptable, our only choice is to order a second appraisal?
- Answer – You are allowed to contact the appraiser and ask them to correct any errors with the appraisal. Please review FNMA FAQ regarding who may contact the appraiser with questions.
Question 2 – If the appraiser uses poor comps and has red flags, we are stuck with the appraisal and can only complain to the AMC. Any thoughts?
- Answer – Section II of AIR states: If there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the Mortgage file, then a secondary appraisal may be ordered. However, the burden lies with you proving the first appraisal was flawed.
Question 3 – Is it required to have a copy of legal description attached as an addendum?
- Answer – Legal description is required to be on the top portion of the appraisal. Legal description attached as an addendum appears to be ok.
Question 4 – Can ANYONE ask an appraiser why certain comps were not used in their report?
- Answer – If your intent is to influence the value then this not allowed. Please review FNMA FAQ regarding who may contact the appraiser with questions.
Question 5 – When is it necessary to perform the income and/or cost approach to value?
- Answer – Income is only necessary on investment properties. Cost approach is only required on manufactured homes and when requested.
(Mortgage Compliance Advisors offers a free webinar every month.
(Mortgage Compliance Advisors, LLC (MCA) makes reasonable efforts to ensure the accuracy of the answers. MCA makes no express or implied warranty of any kind respecting the information presented and assumes no responsibility for errors or omissions. This online chat is not legal advice and should not be used as a substitute for proper professional or legal advice.)