The Federal Housing Administration (FHA) issued this Friday a new policy that will be implemented on Oct. 1, requiring second property appraisal on loans previously indicated by the FHA as potentially having inflated property valuation from reverse mortgage lenders. HousingWire reported that the policy, enacted by the Home Equity Conversion Mortgage (HECM) program, aims to reduce Mutual Mortgage Insurance (MMI) Fund risk and combat inflated valuations.
Under the new policy, the FHA will implement assessments of new HECM loans, determining if a loan will be approved for endorsement or needs a second appraisal through risk. Collateral risk assessments will be mandatory, permitting lenders from closing a HECM without evaluation or the completion of a second appraisal.
In regard to fees, the cost applied from the second appraisal will join the loan’s closing costs, requiring lenders to use the lowest appraised value.
The FHA’s announcement rendered commentary from many, namely praise from The National Reverse Mortgage Lenders Association (NRMLA). “This is a step that has become necessary due to HUD’s analysis of appraisals on properties subject to a HECM,” said NRMLA President and CEO Peter Bell. “It is a logical step to address the concerns they’ve identified. We appreciate that they’ve chosen to implement this, while avoiding any decrease in Principal Limit Factors or increase in Mortgage Insurance Premiums.”
In other real estate news:
- An Improvenet.com poll reveals cities with the most annoying neighbors in America. Researchers surveyed residents from 24 of the largest cities in the U.S., finding Dallas, Miami, and Austin to have the most annoying residents and Minneapolis, Portland and Atlanta to have the least. The study found noise to be the leading aggravating offense, with loud music, children, pets, and TV’s as the most identified crimes. Miami, Chicago, and Houston made the top ten in a list of most annoying city neighbors, at No.2, No.8, and No.9. Shortly following, Boston ranked in at No. 18 and Atlanta at No.22.
- New analysis from RealEstate.com, a Zillow group brand, and Thumbtack found that new homeowners can expect to pay an estimated $40,000 in one-time fees on the average U.S. home. The two companies partnered to help homebuyers comprehend the blatant and hidden costs of buying a house and turning it into a home. On a chart depicting total average one-time costs of buying a home, Chicago, Houston and Atlanta had close estimations at $41,462 and $37,347 and $37,102. Following at a higher price, is Miami-Fort Lauderdale with $49,853. The most expensive was Boston, at an estimated $78,090.
- National homebuilder and developer Taylor Morrison announced closing on their acquisition of AV Homes. This year, the newly joint organization is predicted to generate $5 billion in revenue, with 54,000 owned and controlled lots throughout 19 markets. “When we set our sights on growing our business, we were looking for a builder whose footprint overlaid neatly with ours and could take us deeper into the top housing markets we operate in today,” said Sheryl Palmer, Taylor Morrison chairman and CEO.
- The Asian Real Estate Association of America (AREAA) will host their National Convention in Las Vegas, Nevada. The conference will be held at the Aria Resort & Casino from Oct. 18-20, and will host thousands of real estate and mortgage professionals. The AREAA is one of the largest AAPI trade organizations in North America, with more than 17,000 members in 39 chapters.