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Pamphlet 26-7 Chapters 13

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Pamphlet 26-7 Chapters 13

    VA Pamphlet 26-7, Revised Chapter 13- Value Notices

    Change 3

    Chapter 13

    Value Notices

    Overview

    This chapter contains the following topics. In this Chapter

    Topic See Page

    13.01 Reviewing Appraisal Reports 13-3

    13.02 Resolving LAPP Appraisal Review Problems 13-5

    13.03 Documenting LAPP Appraisal Reviews 13-7

    13.04 LAPP-Issuing a NOV at Other Than the Appraiser’s Value 13-9

    Estimate

    13.05 Preparing Notices of Value 13-11

    13.06 Notice of Value Conditions and Requirements 13-12

    13.07 Distributing Notices of Value 13-24

    13.08 How Long Notice of Value is Valid 13-25

    13.09 Requesting Changes to the NOV 13-26

    13.10 Transfer of Appraiser’s Reports Between Lenders 13-29

    13.11 Discovery of Title Limitations & Conditions 13-30

    13.12 Effect of Major Disasters on Notices of Value 13-34

    Exhibit 1LAPP Lender’s Notice of Value 13-35

    Continued on next page

    July 14, 2003 13-1

VA Pamphlet 26-7, Revised Chapter 13- Value Notices

    Change 3

Overview, Continued

    Accurate value estimates based on proper appraisal reviews are essential to the viability of Importance of

    the VA Loan Guaranty program and have a direct effect on the interests of the Government, VA Value veterans and lenders. Estimate

    Since appraisal reports are subject to change upon review, lenders and holders should rely Rely Only on

    only upon a VA notice of value issued by the appraisal reviewer. Notice of Value

    The table below describes the steps to follow when issuing a Notice of Value. Issuing a Notice

    of Value

    Steps Description Refer to

    1 Confirm eligibility of property for ? Chapter 10, and

    appraisal and LAPP processing. ? Section 15.09.

    2 Review the appraisal report. ? Section 13.01, and

    ? Chapter 11.

    3 Resolve any appraisal-related Section 13.02.

    problems.

    4 Document the appraisal review. Section 13.02.

    5 Prepare the Notice of Value. ? Section 13.04

    ? Section 13.05

    ? Section 13.06, and

    ? Section 12.08.

    6 Distribute the Notice of Value. Section 13.07.

    Note: Every property eligible for the Lender Appraisal Processing Program (LAPP) should be

    processed under LAPP. If a LAPP lender fails to process an eligible property under LAPP,

    the request for VA guaranty must include a detailed explanation.

    Continued on next page

July 14, 2003 13-2

    VA Pamphlet 26-7, Revised Chapter 13: Value Notices

    13.01 Reviewing Appraisal Reports

Every appraisal made for VA purposes must be reviewed either by the lender’s VA-Purpose of

    authorized staff appraisal reviewer (SAR) under the Lender Appraisal Processing Program Review (LAPP), or a VA staff appraiser in order to

    ? confirm that the photographs accurately reflect the appraiser’s description of the subject and comparable properties

    ? verify that the appraisal report is fully complete, clear and prepared according to industry-

    accepted appraisal techniques and VA instructions ? determine that the appraiser's methodology is appropriate and that the appraiser's

    conclusions are consistent, sound, supportable, logical and based upon data in the

    appraisal report

    ? determine, through use of reasonably available information, that the appraiser's value

    recommendation and other conclusions are consistent with those in similar cases recently

    processed

    ? identify all property-related conditions and requirements that must be satisfactorily

    resolved before the property can become the security for a VA guaranteed loan, and

    ? issue a notice of value.

The following references in this handbook provide additional information when reviewing Handbook

    appraisal reports. References for Reviewing ? Chapter 11 Appraisal

    ? Section 13.02 Reports

    ? Section 13.03

    ? Section 13.04

    ? Section 13.05

    ? Section 13.06

    ? Section 13.07, and

    ? Section 13.08.

    Continued on next page

    January 1, 2001 13-3

    VA Pamphlet 26-7, Revised Chapter 13: Value Notices

    13.01 Reviewing Appraisal Reports, Continued

The appraisal reviewer must maintain up-to-date Other

     Reference ? copies of this handbook and all other VA-issued directives and other reference material Materials pertaining to the Loan Guaranty program.

    ?

    ? For LAPP lenders, this includes the material issued by VA field stations having jurisdiction over each area where the lender originates LAPP loans ?

    ? applicable Federal statutes and VA regulations

    ? “Uniform Standards of Professional Appraisal Practice,” published by The Appraisal Foundation (www.appraisalfoundation.org), and

    ? real estate market sales data (to be used for comparative purposes).

Additional material is recommended:

    ? Any publications providing instructions for completing the Uniform Residential Appraisal Report (URAR). In the event of a conflict between VA and private source material,

    however, the VA-issued material must be considered controlling. ? Other current reference materials regarding major real estate market conditions and

    trends. This includes weekend subscriptions to major newspapers, which typically have

    expanded real estate sections; industry-related newsletters; publications which provide

    analyses and forecasts of various housing and mortgage trends and relevant statistical

    data.

Although VA has no requirement that appraisal reviewers visit the geographic areas where Real Estate

    appraised properties are located, they should keep up-to-date on major real estate market Market conditions and trends, in order to properly analyze the location-related information Familiarity contained in appraisal reports.

    January 1, 2001 13-4

Chapter 13- Value Notices VA Pamphlet 26-7, Revised

    Change 3

13.02 Resolving LAPP Appraisal Review Problems

    LAPP lenders are expected to take reasonable steps to resolve problems detected during their Contact and

    appraisal reviews. While branch office staff and authorized agents may contact the fee Cooperation appraiser about the timeliness of a particular appraisal, only the lender’s VA-authorized

    staff appraisal reviewer (SAR) may contact the appraiser to discuss valuation matters.

    VA fee appraisers are expected to cooperate in addressing concerns about the content of

    their appraisal reports and timeliness in completing assignments.

    When information, methodology or conclusions in the appraisal report require additional Additional

    clarification or support, the SAR must contact the fee appraiser and obtain the necessary Information information.

    Any clarification, correction or revision by a fee appraiser to an appraisal report must be in Appraisal

    writing, signed and dated. The fee appraiser must clearly identify any revised appraisal Report Changes report as such in bold letters.

    The lender must attach any clarification, correction or revision to the original appraisal

    report provided by the fee appraiser. The withholding of this or any other appraisal

    documentation is unacceptable and may result in administrative action against the lender

    and/or fee appraiser, as appropriate.

    See: Section 13.04, which addresses restrictions on changes by the SAR to the fee

    appraiser’s value estimate.

    Continued on next page

July 14, 2003 13-5

Chapter 13- Value Notices VA Pamphlet 26-7, Revised

    Change 3

    13.02 Resolving LAPP Appraisal Review Problems, Continued

    When a substantive problem is not corrected after a reasonable effort, the SAR must send Referral to VA

    the VA office of jurisdiction

    ? a written report which clearly outlines the problem(s) and the dates and results of contact

    with the fee appraiser, and

    ? the appraisal report and/or other pertinent documentation.

    VA will subsequently notify the appropriate parties of its decision and document the fee

    appraiser's performance file, the lender’s file and the case file, as appropriate. It may be

    necessary for VA staff to review the appraisal report and issue a VA Certificate of

    Reasonable Value.

    Note: Refer all complaints about property condition or appraiser performance to VA.

    LAPP lenders are responsible for resolving any timeliness problems involving authorized Timeliness

    agents and branch personnel.

    SARs should notify VA when fee appraiser timeliness expectations are not being met.

    VA offices are expected to be as consistent as possible regarding NOV conditions and VA Consistency

    requirements. They must notify LAPP lenders by posting changes to the ―approved local

    conditions‖ section of the C&V web pages when a local situation dictates an additional

    condition or requirement not listed on the standard NOV.

    Reference: See Chapter 13, Exhibit 1, LAPP Lender’s Notice of Value.

July 14, 2003 13-6

    VA Pamphlet 26-7, Revised Chapter 13: Value Notices

    13.03 Documenting LAPP Appraisal Reviews

VA does not consider the lender's staff appraisal reviewer (SAR) to be acting as an SAR are not

    ―appraiser‖ when reviewing appraisal reports, or taking on the responsibility of a ―cosigner‖ Appraisers or a ―supervisory appraiser.‖ Except for the certification described below, the SAR should

    not sign, initial or make any comments or adjustments anywhere on the appraisal report.

The SAR must SAR’s

     Responsibility

    ? circle the fee appraiser's market value estimate

    ? sign and date any SAR comments or other documentation relative to the appraisal review

    and attach that material to the appraisal report, and

    ? complete the SAR certification.

The certification must be either SAR

     Certification ? stamped on the appraisal report in the ―cost approach‖ or ―reconciliation‖ block in a Placement manner which least obscures other information, or

    ? attached as a separate sheet which also includes the VA case number and property address.

The certification must be signed, dated and read, ―I reviewed this appraisal report to SAR

    determine the acceptability of the property for VA Loan Guaranty purposes in light of VA Certification minimum property requirements and the appropriateness, completeness, consistency and Wording accuracy of the fee appraiser’s reasonable value determination. In completing this

    administrative review, I’m performing a due diligence function and not acting as, or taking

    the responsibility of, a cosigner of the report or supervisory appraiser. Any disagreements or

    comments, etc., resulting from the administrative review of this appraisal are fully explained

    on the attachment to this report.

    This box [ ] is checked if there were none.

    ______________________________ ______________ _______‖

     Signature LAPP ID. No. Date

    Continued on next page

    January 1, 2001 13-7

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