Updated Single Family Housing Policy Handbook 4000.1 on new ROV guidance.
Apply to FHA Single Family Title II forward and Home Equity Conversion Mortgages.
Lenders must disclose to borrowers that they may request an ROV with instructions.
Including what information will be required and the expected ROV processing times.
Disclosures must be provided at time of application and presentation of the appraisal.
New policy includes a requirement that underwriters be trained to identify and remedy appraisal deficiencies, including racial and ethical bias; ROV status communications.
Standards for lender quality control of appraisal reviews and reconsiderations of value.
Also, standards for appraisers to respond to requests from lenders for ROV review.
Effectiveness
Must be implemented for FHA case numbers assigned on or after Sep. 2, 2024.
Jul. 2024 HUD FHA ROV Policy
On Jul. 2, 2024, HUD issued FHA INFO 2024-43 regarding FHA ROV policy updates.
Updated FHA Connection (FHAC) system and an industry stakeholder briefing webinar as part of the implementation of appraisal ROV updates ML 2024-07 issued on May 1.
FHA modified FHAC for forward and Home Equity Conversion Mortgages (HECM).
A sub-section titled Borrower Request for Appraisal Review Information will be added to the Endorsement information section of the Insurance Application screen.
Mortgagees must respond to questions on appraisal request, basis, request resolution.
New functionality will be available for case numbers assigned on or after Sep. 2, 2024.
FHAC guide updated with instructions for borrower request for appraisal review.
Mortgagees must retain all documentation associated with an ROV in FHA Case Binder.
Industry stakeholder briefing webinar on ROV guidance to be held on Aug. 1, 2024.
Aug. 2024 Fannie Extended Implementation Date
On Aug. 6, 2024, HUD issued Letter 2024-16 to extend the implementation date for development of a framework for lenders to review ROV updates, to Oct. 31, 2024.
Feedback gathered after the initial ROV announcement revealed more time needed for lenders to meet all the elements outlined in the policy, so was extended by 60 days.
HUD also extended the implementation of the mortgagee letter (ML) 2024-07.
Lenders should implement the ROV policy immediately but must do so for loans with applications, and FHA case numbers re ML 2024-07, dated on or after Oct. 31, 2024.
Regulators
HUD
Entity Types
Bank; CU; MG Orig; Servicer; Thrift
Reference
Lt 2024-16, FHA INFO 2024-54, 8/6/2024; PR FHA INFO 2024-43, 7/2/2024; PR 24-096, Lt 2024-07, FHA INFO 2024-24, 5/1/2024;
Functions
Actuarial and Valuation; Compliance; Financial; Legal; Operations; Reporting; Underwriting
