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Thank you for contacting the FHA Resource Center, a response to your inquiry is provided below. If you have additional questions you can submit them via email to info@fhaoutreach.com or contact us at 1-800-225-5342. Please do not respond to this email unless you need further clarification or wish to initiate a new service request.

FAQ : When a case number is transferred with a completed appraisal, may a new appraisal be requested?

Solution Details : When a borrower has switched lenders, the 1st lender must transfer the case to the 2nd lender upon borrower request. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.

? In accordance with USPAP, the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. The appraiser cannot 'readdress' (transfer) the original appraisal report to another party and must perform a new appraisal assignment in compliance with Advisory Opinion #26 and FAQ # 74 in the 2008-2009 edition of USPAP.

For cases assigned on or after January 1, 2010:

? A 2nd appraisal may be ordered by the 2nd lender when:

1. The 1st appraisal contains material deficiencies determined by the DE underwriter for the 2nd lender.

2. The appraiser performing the 1st appraisal is on the 2nd lender?s exclusionary list.

3. Failure of the 1st lender to provide a copy of the appraisal to the 2nd lender in a timely manner would cause a delay in closing, posing potential harm to the borrower. Potential harm includes events outside of the control of the borrower such as loss of interest rate lock, purchase contract deadline, foreclosure proceedings, and late fees.

For cases in 1 and 2 above, copies of both appraisals must be retained in the case binder. For cases in 3 above, the 1st appraisal must be added to the case binder when it is received. In all cases, the lender must document why a 2nd appraisal was ordered and retain the explanation in the case binder.

FHA prohibits appraiser shopping where lenders order additional appraisals in an effort to assure the highest possible value for the property and/or the least amount of deficiencies and/or repairs are noted and required by the appraiser.

ML: 09-29