Important Updates

We had an underwriter require us to make a list to sales price ratio adjustment to our Comparable Listings stating that all listing require a list/SP ratio adjustment or they will not close the loan. However, as indicated by the 1004MC it appears the ratio is over 100% therefore not warranting an adjustment for the listings. Everyone needs to keep in mind that any time delays will only frustrate my client and influence them to not do business with me since most other appraiser will just submit to their demands.

Respectfully,

From: HUD
Sent: Thursday, April 15, 2010 12:54 PM
To: 'Douglas E. Hendricks'

Mr. Hendricks,

In response to our discussion regarding application of adjustments for list to sale price discounts for active listings and/or pending sales, please review the following:

FHA does not have a policy regarding “mandatory” application of list to sale price discounts for active listings and pending sales for all appraisals; however, pursuant to Mortgagee Letter 05-02 and your signed appraisal certification, the appraiser is required to make market-based adjustments to the comparable sales.

If the property is located in a declining market based on the results of the 1004MC, the appraiser is required to provide a minimum of two active listings and/or pending sales. Active listings should be adjusted to reflect the list to sale price ratio. In reconciliation, if the adjusted sale price of the comparable sales is higher than the adjusted price of the active/pending sales, the appraiser must determine if a market condition adjustment is warranted.

For your reference, I have attached the mortgagee letters with additional explanation.

Sincerely,

HUD

Denver Homeownership Center

Technical Support Branch