The


Federal
Housing
Administration
(FHA)
this
week

announced
that
its
FHA
Connection
(FHAC)
portal
—
which
provides
FHA-approved
lenders
and
business
partners
with
secure
online
access
to
computer
systems
at
the


U.S.
Department
of
Housing
and
Urban
Development
(HUD)
—
will
be
updated
to
accommodate
the

implementation
of
a
new
Reconsideration
of
Value
(ROV)
policy
for
appraisals.

Alongside
the
publication
of

Mortgagee
Letter
(ML)
2024-07,
FHA
said
the
new
policy
would
enable
mortgage
borrowers
to
“request
a
re-assessment
of
the
appraised
value
of
their
property
if
they
believe
that
the
appraisal
was
inaccurate
or
biased.”

The
new
rule,
which
must
be
implemented
by
lenders
by
Sept.
2,
2024,
applies
to
all
FHA
single-family
forward
and

reverse
mortgage
programs.
It
enhances
current
ROV
policy
while
adding
additional
clarity
for
appraisal
reviews,
according
to
FHA.
These
include
“improvements
to
the
process
by
which
borrowers
may
request
an
ROV
if
they
identify
a
problem
with
the
appraisal.”

FHAC
will
be
modified
for
both
forward
and
Home
Equity
Conversion
Mortgage
(HECM)
loan
programs
to
include
a
“Borrower
Request
for
Appraisal
Review
Information”
in
the
portal’s
endorsement
information
section
of
the
insurance
application
screen.

Lenders
will
be
required
to
respond
to
a
host
of
new
questions
to
progress,
including
whether
or
not
a
borrower
requested
an
ROV,
as
well
as
several
related
queries
about
the
basis
for
such
a
review.

There
will
also
be
several
selections
for
the
lender
to
answer
regarding
how
such
a
request
was
resolved.
Options
include
resolution
by
the

underwriter
(so
long
as
sufficient
information
is
included
in
the
case
binder);
the
underwriter’s
submission
of
an
ROV
request
to
the
appraiser;
the
underwriter’s
determination
that
the
appraisal
was
“materially
deficient”;
or
an
“other”
option
that
can
be
filled
in
with
relevant
details.

“The

FHAC
Guide
has
been
updated
and
is
available
on
the
portal
homepage,”
the
department
explained
this
week.
The
guide
has
detailed
instructions
for
the
new
section
on
page
20
for
single-family
forward
mortgages
and
page
17
for
HECM
loans.

Lenders
must
also
retain
any
documentation
related
to
an
ROV
for
inclusion
in
the
case
binder.

“This
includes
all
written
communication
among
the
mortgagee,
the
borrower,
the
appraiser,
and
any
other
parties
involved
in
the
ROV
process,”
the
announcement
said.
“As
a
reminder,
the
provisions
of
ML
2024-07
may
be
implemented
immediately
but
must
be
implemented
for
FHA
case
numbers
assigned
on
or
after
September
2,
2024.”

FHA
will
also
be
holding
a
virtual
stakeholder
briefing
on
Aug.
8
where
industry
members
can
ask
questions
of
FHA’s
subject-matter
experts.

Event
registration
is
now
live.

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