Implementation deadline for the assessment policy has been moved to October 31
A policy designed for lenders to review and respond to borrower-initiated reconsideration of value (ROV) applications for appraisals – originally scheduled to be implemented between August 29 and September 2 – has been postponed until October 31, 2024. That is according to communications from Fannie Mae, Freddie Mac and a new mortgage letter (ML) published by the Federal Housing Administration (FHA).
The policy – announced in May by the U.S. Department of Housing and Urban Development (HUD), the FHA and the Government Sponsored Enterprises (GSEs) in partnership with the Federal Agency for Housing Financing (FHFA) – is designed to “develop an aligned approach for both FHA-insured mortgages and mortgages purchased or guaranteed by” the GSEs, HUD explained.
But following industry feedback received after the policy was announced, agencies have chosen to delay implementation to give industry members additional time to integrate it into their operations.
“Major stakeholders have provided compelling feedback that additional time is needed to properly meet the EU’s new expectations [May] ML due to personnel considerations, third-party coordination, and technology limitations,” FHA said in an information notice. “While the provisions have been outlined […] may still be implemented immediately, they must be implemented for FHA case numbers assigned on or after October 31, 2024.”
The expansion announced by FHA and HUD is consistent with expansions also announced by the GSEs on Tuesday.
The previously announced policy, which applies to all FHA forward and reverse mortgage programs for single-family homes, improves the current ROV position and adds new, clarified explanations for appraisal reviews. These include “improvements to the process by which borrowers can request an ROV if they identify an issue with the assessment,” the original ML said.
The guidelines also require lenders to “incorporate a borrower-initiated ROV process that meets certain minimum requirements, including providing information to borrowers at the loan application and at the time of delivery of the appraisal, with instructions on how to request an ROV.” ”
In the original announcement, HUD called the guidelines a step to meet the obligations of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE), which includes representatives from 13 federal agencies.
