Department Of Veterans Affairs 10 Things the VO’s want you to

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Department Of Veterans Affairs 10 Things the VO’s want you to know Presenters: Kevin Diomedi, Marty Finlin, & Ryan Nelson

Tidewater & Reconsiderations Of Value Topics 1 & 2 Trivia Question What percentage of total appraisals completed had Reconsiderations of Value requested in fiscal year 2017? a.18% b.0.2% c.4% d.0.4%

Tidewater & Reconsiderations Of Value Answer: D 0.4% of appraisals resulted in Reconsiderations of Value in Fiscal year 2017 a.18% b.0.2% c.4% d.0.4%

Tidewater & Reconsiderations Of Value Tidewater History In 2003, the Tidewater process began as a test program in what is commonly known as the “Tidewater” region of southeastern Virginia Gives lender or designee the opportunity to provide additional information prior to completion of the appraisal

Tidewater & Reconsiderations Of Value Tidewater Circulars Established in 2003 by VA Circular 26-03-11 Currently updated by Circular 26-17-18 Only applies to purchase transactions Purpose is to provide relevant market data to VA fee appraisers resulting in fewer value disputes

Tidewater & Reconsiderations Of Value Tidewater Process Appraiser contacts the listed point of contact (POC) on VA Form 26-1805 when the appraised value of a property is likely to be lower than the sale price. The appraiser will – – – – Contact listed POC Add public note in WebLGY when Tidewater is enacted Only discuss enacting Tidewater with POC Not discuss the content of the appraisal

Tidewater & Reconsiderations Of Value Tidewater Process POC has two business days to respond from the date of first contact Preferred format is similar to the comparable sales grid or Multiple Listing Service (MLS) property reports Must be closed sales, not listings

Tidewater and Reconsiderations of Value Tidewater Best Practices Communication – Provide information as quickly as possible and document WebLGY notes. Documentation – Provide information and data in a clear and concise manner. Refer to VA Circular 26-17-18 or contact the RLC with any questions

Tidewater and Reconsiderations of Value Reconsideration of Value (ROV) Post-Tidewater Applies to all VA appraisals Any party to the transaction may dispute the opinion of value via the Reconsideration of Value process Disputes are processed by the Regional Loan Center

Tidewater and Reconsiderations of Value Reconsideration of Value Does not require a change in appraiser’s opinion of value nor does it require any updates to the appraisal report May result in VA amending the NOV Only changed if fully supported by real estate market data

Tidewater and Reconsiderations of Value ROV Requestor Responsibilities A concise narrative explaining the rationale behind the requested reconsideration of value. The specific value being requested Provide any information supporting the requested value including: – Completed sales comparison grid – MLS Sheets

Tidewater and Reconsiderations of Value ROV Requester Responsibilities No listing or pending sales Comparable properties should be superior to those selected by the appraiser: More recent sales Closer in proximity More similar Closed sales BEFORE the effective date of appraisal VA recommends only the THREE best sales be provided

Tidewater and Reconsiderations of Value ROV Appraiser Responsibilities Appraiser contacted directly by VA Review additional data and address any requested corrections or clarifications Address all questions and additional information Generally respond within two business days

Tidewater and Reconsiderations of Value ROV Process and Follow Up Field Review in certain cases Notification to Requester Notification to Lender Amend NOV, if applicable

Appraisal Orders Topic 3 Completing the 1805 Upload of Sales contract Duplicate orders

Upload the Sales Contract Circular 26-17-03 (February 6, 2017) Upload the contract to WebLGY at time of order No later than 1 business day from assignment Assignment will be held until provided and VA notified Updated contracts

Duplicate Reports Lender should not be placing more than one order Generally, 2nd second assignment will be cancelled Review of duplicate orders by the RLC

Transfer of Appraisals Topic 4 Lender SAR has the ability to transfer appraisals. In case where there are difficulties, please contact the RLC of jurisdiction via email with all details VA does not require the appraisal to be updated The 1805 will not update in the system once the appraisal is uploaded

Fee Payments Topic 5 Lenders certify they will pay the appraiser at time of order – Acceptance of responsibility Payment is due with receipt of invoice (This should be included in uploaded report) Pre-payment Transferred appraisals

Builder ID’s Topic 6 For all new and proposed construction properties the builder must obtain an ID number for each state where they are building homes for Veterans who are obtaining VA guaranteed loans. Builder must meet any state and/or local licensing requirements Builder must have a valid ID number prior to the NOV being issued

Builder ID’s (cont’d) Builders wishing to apply for an ID number send these 4 items to the RLC of jurisdiction 1. 2. 3. 4. Copy of builder’s license VA Form 26-421 EEOC VA form 26-8791, VA Affirmative Marketing Certification Builder Information and Certifications for the VA Loan Guaranty Program submitted on builder’s letterhead or attached to a statement on the builder’s letterhead which references it. The certification statement and forms are available: http:// www.benefits.va.gov/HOMELOANS/appraiser cv builder info.asp

NOV Extensions Topic 7 NOV extensions 1. Purchase cases 2. Refinance cases 3. Liquidations

Multiple Parcel Purchase Topic 8 Are multiple parcel purchases permitted? What are the considerations? Who should I contact to discuss my concerns?

Communications Topic 9 Communicating with the Appraiser. Are we allowed? Communicating with the RLC RLC contact information may be found at: https://benefits.va.gov/HOMELOANS/contact rlc info.asp

Eligibility FAQ’s Topic 10 Leaseholds Private roads Business use Farm/Ranches

Leaseholds Are Leasehold Estates eligible for VA Home Loan? Yes, if the leasehold meets the requirements of CFR §36.4354 Estate of Veteran in real property. VA circular 26-15-19 provides instructions regarding property eligibility requirements for leasehold estates.

Leasehold (Cont’d) Required documentation: Copy of the lease which identifies the property to be lease, lessor, lease term, rent Copy of all preceding assignments that may have occurred prior to the current assignment Copy of Sales contract and/or Copy of Veteran-lessee consent statement in cases of age or income restricted leasehold communities.

Private Roads What Satisfies the Private Road Condition? Documents used to satisfy the condition on the Notice of Value must be retained and included in the loan file at closing. Those documents are commonly: – Recorded Homeowners Association documents – Certain state laws already reviewed and accepted by VA Counsel (Vermont and Connecticut) – Recorded easements and maintenance agreements – VA approved waivers

Business Use Nonresidential use: Any nonresidential use of the property must be subordinate to it’s residential use and character. Limitations: Nonresidential use cannot impair the residential character of the property, or Exceed 25 percent of the total floor area Farms and Ranches are eligible Lenders Handbook Chapter 11, section 12g

Reference Tools General Questions – Toll free: 877-827-3702 VA Lender’s Handbook – http://www.benefits.va.gov/warms/pam26 7.asp VA Circulars – http://www.benefits.va.gov/homeloans/resources circulars.asp

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