FHA Reports Appraisal Issues on 37 Percent of Reverse Mortgage Loans

By Jessica Guerin

The Federal Housing Administration’s investigation into possible appraisal inflations on reverse mortgage loans revealed an issue the agency decided it must address.

Last Friday, the FHA announced that it will require a second appraisal on select reverse mortgage loans that have been flagged by the agency as having the potential for an inflated property valuation. As part of the new guideline, which takes effect Oct. 1, 2018, lenders must submit their appraisals to FHA to undergo a collateral risk assessment.

In a call with reporters on Monday, the FHA revealed its reasons for making the changes.

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