In response to questions raised by NRMLA and its members, the Federal Housing Administration published a list of Frequently Asked Questions to help clarify its new collateral risk assessment policies announced in Mortgagee Letter 2018-6.
When FHA was asked how long it would take to determine if a second appraisal was required, it responded: “The FHA Resource Center will respond to Mortgagee emails within approximately 3 business days of receipt to notify the Mortgagee if the collateral risk assessment determines that a second appraisal will or will not be required. Once the fully-automated system is in place, the Mortgagee will be immediately notified after logging the appraisal in FHA Connection.”
A working group within NRMLA’s HUD Issues Committee has been actively monitoring the situation and will continue to compile questions as needed for FHA’s input.
ML 2008-6 specifies that FHA will perform risk assessments of all appraisals for case numbers assigned on or after October 1, 2018. Based on the outcome of that assessment, FHA may require a second appraisal be obtained prior to approving the reverse mortgage for insurance endorsement. Under the new policy, mortgagees must not approve or close a HECM before FHA has performed the collateral risk assessment and, if required, a second appraisal is obtained.