This Appraisal Reconsideration of Value Policy (the “ROV Policy”) outlines the procedures and guidelines that Integrity Mortgage Group (the “Company”) follows when considering a request for reconsideration of the appraised value for mortgage lending purposes. The Company is committed to ensuring the accuracy and fairness of property appraisals while adhering to applicable regulatory requirements. Integrity Mortgage Gorup takes its role in ensuring fair and responsible lending very seriously and does not tolerate bias or discrimination in any aspect of a loan origination process. The Fair Housing Act does not permit any form of discrimination on the basis of the applicant’s race, color, national origin, religion, sex (including gender identity or sexual orientation), marital status, military status, or disability. In addition, the Equal Credit Opportunity Act further protects applicants on the basis of their age, or receipt of public assistance.
A Reconsideration of Value is a request made by a borrower for the appraiser to reevaluate the analysis and conclusions of the initial appraisal using additional information provided by the borrower that is believed to be relevant to the appraiser’s value determination.
The purpose of this Policy is to establish a standardized process for borrowers to request a reconsideration of the appraised value when they believe that the initial valuation may not accurately reflect the market value of the subject property.
This Policy applies to all residential mortgage loans originated, underwritten, or serviced by the Company. It covers requests for appraisal reconsideration during the loan origination and underwriting process.
Policy Guidelines:
1. Request for Reconsideration:
– Borrowers may request an appraisal reconsideration by submitting a written request along with supporting documentation to appraisaldesk@integritymtgs.com within 10 days of receiving the initial appraisal report. Every consumer is entitled to the right to submit this request regardless of whether any party involved in the transaction believes a change of value will occur.
– Requests must include specific reasons and evidence supporting the contention that the appraised value is inaccurate.
2. Initial Review:
– Upon receiving a request for appraisal reconsideration, the Company will perform an initial review to determine if the request meets the basic requirements outlined in this policy. In some cases, depending on the loan type, the company’s underwriter must review all Borrower Requests for review of appraisal Results. The underwriter must review the appraisal in accordance with the requirements for Appraisal Review and Quality of Appraisal (II.A.3.a.v.).
– If the request is incomplete or lacks substantive evidence, the Company may request additional information from the borrower. Provided that the Form is acceptable, the Company’s Appraisal Desk will submit the ROV request to the appraiser.
The appraiser will consider each element of the request and may agree or disagree that an adjustment or correction to the report is appropriate. The appraiser is an independent valuation professional who will determine whether or not the appraisal report warrants a change and cannot be directed by anyone in accordance with Appraisal Independence Requirements. If the borrower’s appraised value comes in lower than expected based on the contract price, this doesn’t necessarily mean the appraisal is flawed or that a second appraisal would result in a higher appraised value. Appraisers are required to abide by USPAP standards, which could limit their ability to consider certain facts or information provided, therefore, the appraiser may not revise the valuation if it conflicts with the regulations and standards that govern the appraisal industry.
5. Decision and Notification:
– Once the appraiser addresses the items or elements indicated by the consumer, the loan officer will communicate the outcome of the reconsideration of value to the consumer.
6. Compliance and Record Keeping:
– The Company will maintain records of all appraisal reconsideration requests, decisions, and related communications as required by applicable laws and regulations.
7. Training and Communication:
– The Company will provide training to its employees, including loan officers, underwriters, and appraisal desk staff, regarding this Policy and its procedures. This policy may be reviewed periodically and updated as necessary to ensure compliance with changing regulatory requirements and industry best practices.
Guidelines for Written Request for ROV Policy:
A realtor and/or websites like Redfin, Zillow, Realtor.com etc… are allowed to be utilized for research for the written request provided that they are accurate and meet the requirements of the general guidelines below:
- Comparables considered are required to be closed sales, meaning an appraiser cannot utilize a property listing or contingent sale as a comparable.
- Comparables should represent recent sales in the market, typically closed within the last 6 to 12 months. The best and most appropriate comparable sales may not be the most recent. An appraiser may utilize a time adjustment depending on when the sale took place relative to changes to the market.
- Comparable sales should be within close proximity to the subject property and ideally located in the same geographic neighborhood. For instance, if the property is located in a sub-division, the best comparables are the recent sales of similar homes in the same subdivision. If proximate comparables are not available due to a shortage of truly comparable sales, the appraiser may select comparables from competitive neighborhoods provided that the appraiser provides analysis and commentary on why comparable sales in a competitive neighborhood were most appropriate.
- Comparable sales should have similar physical characteristics (e.g. similar room count, gross living area (GLA), style (e.g. ranch, split level), and condition). This does not mean the comparable must be identical to the subject property, rather it should appeal to the same market participants who would also consider purchasing the subject property. The appraiser may make adjustments for dissimilar characteristics such as GLA, room or bathroom count, condition, etc.
Appraiser Independence Requirements
The Appraiser Independence Requirements prohibit anyone from influencing or trying to influence an appraiser’s value conclusion through coercion, collusion, compensation or intimidation.
To avoid any appearance of influence please review the following prior to the written request submission:
-Do not mention desired or conclusive market valuation.
-Do not provide a prior appraisal report; however, any comparables meeting the general guidelines outlined above can be included.
-Avoid the use of any derogatory comments and profane language. This process is designed to be a respectful standardized process to submit a ROV.
We may ask to resubmit the ROV Request Form if these guidelines are not followed.
For a Conventional appraisal converted to an FHA appraisal, the appraisal must adhere to the FHA Minimum Property Requirements (MPR) and Minimum Property Standards (MPS) and must be an FHA Approved Appraiser.
For an FHA loan appraisal that is later converted to a conventional loan, the converted appraisal report must be uploaded to the UCDP as per the requirements.
This does not apply to VA loans, since the VA assigns the property appraiser.