[kowsley]

We are currently trying to determine how we can work through the new appraisal guidelines and be able to utilize an appraisal that our seconary market investor has requested. For example, we have a customer that comes in for refinancing and to provide them the best rate possible, we refer them to our secondary market department. This department simply serves as an originator for our secondary market investor; therefore, the appraisal comes back in the investor’s name, not our bank name. If the loan officer is doing a HELOC on the same property simultaneously, we are not able to use the same appraisal because the investor won’t release the appraisal to us. We also can’t accept the appraisal from the customer because it was not properly engaged by a FI. It seems ridiculous that we would have to order a different appraisal considering the loans are being done simultaneously. Has anyone else crossed this bridge? Any suggestions, ideas?

[JGo9]

Kowsley,

Compliance sometimes ends up being ridiculous.

I would go back to the same appraiser and see if they’ll address the appraisal to you. Most of them will cut your customer a break if the other appraisal was been fairly recent.

[Anonymous]

Another question on this topic . . . we are underwriting a 2nd mortgage loan. The 1st mortgage is with another lender and that lender is willing to provide a copy of the appraisal to our bank. What documentation is required to confirm that the appraiser was engaged appropriately? Is an engagement letter sufficient? What should we get if the other lender doesn’t use engagement letters? Is there a form the other FI should complete assigning their interests to our bank?

[JGo9]

Kowsley,

I’ve always understood that an appraisal must be addressed to the bank and not another financial institution. Also, from what I know about USPAP, it would be a violation of USPAP for the appraiser to just change the name to another financial institution.

I would advise against this practice.

[Author]

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