One of the areas that the Fannie Mae and Freddie Mac have really been cracking down on is the quality of appraisals as well as fair lending in appraisals.

The new FHA Mortgagee Letter 2024-7 gives options for a reconsideration of value for FHA as well as Fannie and Freddie.

The key to success in reconsideration of value is how you approach the process. If a value comes in lower than expected and believe it or not higher than expected and you do not need the value it can cause issues due to over valuation.

The Mortgagee letter for FHA that just came out added verbiage on fair lending as in the mentioning of a protected class that has either lived in the home, next to the home or in the proximity of the home cannot be used to alter the value of a home.

Here are a few items to consider when your appraisal do not come in at value.

Read the CU Score and the comments. If it is above a 3 or 4 look to see why. See if it makes sense.

Before pushing for a reconsideration of value it is vital to explain why comps used are not accurate and provide comps from your realtor that support the home better than the ones used. You will have to back this up with comments. For FHA they say give it one shot and to provide up to 5 comps to reconsider the value.

Look at condition and quality rankings in the grid and truly see if what condition the property is in is truly superior or worse than the shown comps. This is an area many appraisers use to get value but then do not put supporting comments in explaining why it is superior.

You must give a thorough presentation when doing a reconsideration of value and you will find greater success. Just saying this is wrong and getting frustrated will not get you anywhere.

Remember we always work in the best interest of the client and not just a paycheck. Make sure they you are paying a fair price for what you are getting.