MBA Offers Recommendations to Address VA-Approved Appraiser Shortage
Mike Sorohan email@example.com
The Mortgage Bankers Association, in a letter to the Department of Veterans Affairs, offered recommendations to improve the appraisal approval process to address shortages in VA-approved appraisers.
The Sept. 5 letter to Jeffrey London, executive director of the VA's Loan Guaranty Service follows up on a March roundtable in which MBA and other industry stakeholders expressed concerns over the shortage of VA-approved appraisers and increased appraisal turn-times.
"Properly addressing the VA appraiser shortage will encourage more lenders to participate in VA lending, thus, allowing veteran home buyers to utilize their VA home loan benefit," wrote MBA Senior Vice President of Public Policy and Industry Relations Steve O'Connor.
MBA offered the following recommendations to further improve VA's Loan Guaranty program, making it more effective and sustainable:
--Create a virtual desktop appraiser to supplement the traditional appraiser process;
--Allow a Property Inspection Waiver for VA appraisals;
--Find ways to attract new appraisers and increase interest in the appraisal industry;
--Allow VA to utilize appraisal management companies when appointing appraisers via the VA portal; and
--Support the Appraisal Qualifications Board proposal to eliminate all college coursework for both licensed and Residential credentials
"VA's timely consideration of ways to improve the VA appraiser approval processes will ensure veterans have full access to this hard earned benefit," the letter said. "Currently, lenders experience delayed VA closings because of a shortage of VA-approved appraisers. Some states, such as Oregon, have very few appraisers. This delay may force veterans to choose other loan programs to meet certain deadlines or face other adverse outcomes."
Because of the lack of VA appraisers, MBA noted a seller may opt for a non-VA contract when multiple offers exist. "If the seller does accept the contract with VA loan terms, the postponement could result in an extension of the contract, penalty fees or loss of earnest money deposit by the Veteran," MBA said. "Should the sellers persuade the Veteran to not opt for a VA loan with 100 percent financing, the veteran then would have to come up with additional cash to close, sometimes upwards of 20 percent of the sales price. Both for purchase transactions and refinance transactions, these delays could result in loss of rate lock, which could then require additional fees or higher rates. Also, the higher rates could end up costing the Veteran tens of thousands of dollars of interest payments over the life of the loan."