FHA Reminds Mortgagees that HECM Appraisal Submission and Assessment Process is Now Fully Automated

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FHA recently released FHA INFO #18-47, reminding mortgagees that the protocols that had been in place on an interim basis for the HECM second appraisal requirements pursuant to FHA Mortgagee Letter 2018-06 (ML 18-06) became fully automated on November 30, 2018.

On September 28, 2018, FHA issued ML 18-06, requiring mortgagees that originate HECM loans to provide a second property appraisal if FHA determines that inflated property values may exist.  Under the new policy, FHA will perform a risk assessment of appraisals submitted for new HECM originations.  A second appraisal may be required if FHA determines that additional support for the collateral value is required before a loan is approved for insurance.

ML 18-06 provides the fully-automated protocols that mortgagees must follow in connection with the new HECM appraisal submission and assessment process.

A copy of ML 18-06 can be found here.

A copy of FHA INFO #18-47 can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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