The Federal Housing Administration announced that it will begin requiring lenders originating new Home Equity Conversion Mortgages commonly referred to as reverse mortgages, to provide a second property appraisal under certain circumstances.
FHA is instructing lenders to provide a second independent property appraisal in cases where FHA determines there may be inflated property valuations, the federal government said last week.
FHA’s new requirement takes effect for case numbers assigned on or after Oct. 1, 2018 through Sept. 30, 2019. FHA will periodically review this guidance and, based on the results, may renew these requirements beyond fiscal year 2019.
FHA will perform a risk assessment of appraisals submitted for use in new Home Equity Conversion Mortgage originations.
Further information on this Federal Housing Administration announcement is available at www.hud.gov