We were notified on Friday, September 29, 2018 that effective Monday October 1, 2018, reverse mortgage appraisals will be reviewed by HUD under the FHA’s collateral risk assessment. This applies to all HECM, or Home Equity Conversion Mortgages.
If the first appraisal appears to have an inflated value, a second appraisal may be required. The lower of the two appraisals would then be used for the reverse mortgage. This is a change to help possibly curb losses in the reverse mortgage portfolio.
At this time, we are being advised that very few appraisals should need the second appraisal. There is a substantial difference is various parts of the country in property values and appreciation.