Hundreds of Lenders Still Haven’t Used FHA Appraisal Portal: “With EAD, you still have to make sure the comparables support the value”

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Hundreds of Lenders Still Haven’t Used FHA Appraisal Portal

There are 1,700 active lenders that have originated FHA-insured mortgages in the last 12 months. Days before the mandatory appraisal delivery deadline, 1,601 of these had gotten credentials to submit appraisals through the EAD portal, and 66.1% had submitted appraisals electronically.

While this means the majority of lenders had some experience delivering e-appraisals prior to the deadline, it also showed there are hundreds that need to act very quickly to get up to speed.

The William Fall Group, an AMC that handles FHA e-appraisal delivery for some of its clients, is equipped to set up clients already in its system “in a very short time,” according to CEO William Fall and Charles Warr, senior vice president of business services. For others it might take longer.

“Predictably, someone will have some technology frustration,” due to the deadline, said Fall.

The electronic collection, analysis and feedback on appraisals could be a helpful risk-management tool for the FHA because the Department of Housing and Urban Development’s insurance arm is responsible for covering the credit risk of many loans with higher loan-to-value ratios.

When LTVs are higher, loans can be more affordable to borrowers because they require less of a down payment, but the collateral provides less of a buffer against possible depreciation that could lower property values relative to the loan.

“You don’t want to have anything off [with the appraisal] when you’re working on that thin of a margin,” said Rumfola.

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