To quote an old movie – just when you thought it was safe to go back in the water (“Jaws”) more not-so-good news.

Effective January 1, 2010, FHA is joining the ranks of the Conventional world when it comes to appraisals. With a new pseudo-HVCC-like requirement – ‘…everyone on a commissioned-based lender staff will be PROHIBITED from selecting the FHA appraiser or having substantive conversations with the appraiser…’ (see FHA Mortgagee Letters 2009-28, 29, 30 and 31). And while lenders are not required to use Appraisal Management Companies, it leaves little option as to the intent.

Giving equal time to the new rulings, there are a few key components that will be helpful, namely:

- Existing FHA appraisals are only tied to a property for 120 days (down from 180 days)

- A second appraisal can be ordered if: a) the first appraisal is deemed “deficient”, b) the first appraiser is on another lender’s “black list”, c) the first appraisal is being “held hostage” by the first lender in order to not lose the business (this happens ALL THE TIME!).

- FHA lenders must use their HUD REGISTERED names in all advertising (no more hiding for third-party originators).

- An FHA lender may not employ anyone who is currently suspended, debarred, under indictment, UNDER INVESTIGATION, or was convicted (or pled guilty) to a Real Estate OR MORTGAGE felony within the past 7 years (no more moving around between companies, one step ahead of “the man”).

Questions? Call Todd Abelson and Tyler Ford, Sunstreet Mortgage, in Tucson Arizona or visit our website www.TucsonMortgages.com