FHA FAQ's on HVCC? Don't bother us!

Published: April 20, 2010

I had a good laugh this morning listening to the boys over at TBWS (Think Big, Work Small). If you don’t listen to these guys you’re missing a chunk of good real estate information because I can’t cover it all.

So after to listening to FHA Commissioner Dave Stevens yesterday and agreeing/disagreeing with what he had to report (FHA’s Dave Stevens Talks. WE created the mess. THEY’ll clean it up. Oboy), the TBWS rant this morning was entitle ‘FHA – The Toothless Dog?’ Now Brian & Frank have been known to embellish a bit sometimes in the interest of entertaining reportage but they are usually factually accurate and thought provoking. This morning they asked the 7 questions on the new FHA FAQ on AMC’s/Reasonable & Customary/Turnaround Times. You all know, of course, that the FHA has adopted certain of those lovely practices we have all come to know and love as HVCC. So they felt it was necessary to answer your questions about how that impacts your business with FHA. Fascinating.

The problem is in the way FHA chose to answer your questions and that makes for the entertainment value which, according to Frank & Brian, essentially boils down to -‘Don’t bother the FHA with that’. So when they ended the broadcast they put up a disclaimer that ‘while the questions were verbatim from the FHA, the answers were a distillation of what the FHA’s answer is.’ Gotcha! I thought. You boys were just poking fun at the FHA for maybe giving some less that comprehensive answers.

WRONG! Go to the website and check it out for yourself. While the answers are all longer and more obfuscative, the bottom line to almost every one is – ‘Don’t bother the FHA’. For example –

  • What is a reasonable and customary fee?
FHA believes that the marketplace best determines what is reasonable and customary in terms of fees. The fee is the result of a business decision, which may or may not be negotiated, between the appraiser and the client. FHA does not set fees or determine whether the fee is reasonable or customary.
Bottom line – Don’t bother the FHA.
  • Where do I complain when a lender wants to pay less than what is reasonable and customary?
The lender is responsible for ensuring that all FHA policies are followed and therefore has the responsibility to ensure that appraisers are paid a reasonable and customary fee. Any appraiser who feels the fee offered or paid is not reasonable or customary should file notice with the lender.
Bottom Line – Don’t bother the FHA.
  • Where do I complain if the AMC asks for unethical or inappropriate fees or services?
FHA has no authority to regulate AMC’s Complain to the lender or appropriate state agency but…
Bottom line – Don’t bother the FHA.
  • There are 4 more FAQ’s you could ask the FHA but the answer to all are about the same –
    • Is reasonable & customary an objective number? We don’t know – don’t bother the FHA.
    • What if the lender always assigns to the lowest bidder regardless of competence? None of our business – don’t bother the FHA.
    • What if there’s a big disparity between the fee the appraiser reports and the HUD-1? That’s an optional reporting thing – don’t bother the FHA.
    • What if the lender requires a quick turnaround? The FHA doesn’t set those standards – don’t bother the FHA.

screwedThis would be quite laughable if it weren’t true. So congratulations out there – contrary to earlier reports that the FHA was not going to jump into bed on the HVCC deal, they have and you get to deal with it. Problems with HVCC? Well, there may be a few but don’t bother the FHA. Seems everybody knows there’s problems with HVCC but nobody wants to tackle it head-on or try to straighten it out. Certainly not the FHA.

Ahhhh yes. Transparency, hope and change. Bend over, we’re from the government and we’re here to help.

The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Last modified: April 20, 2010 at 10:40 am | Originally published: April 20, 2010 at 10:40 am
Printed: September 29, 2020