VA home loan appraisal system under pressure
Many appraisers are reluctant to work with Veterans Affairs as pressure mounts due to regulatory burdens, according to the National Association of Realtors' 2016 Veterans and Active Military Home Buyers and Sellers Profile. Michelle Bradley, a state-certified general real property appraiser and immediate past chair of NAR's Real Property Valuation Committee, testified before the House Veterans Affairs Committee Subcommittee on Economic Opportunity. Bradley explained to members of the committee that while good appraisals are key to maintaining a strong VA Home Loan Guarantee Program, regulatory burdens are getting in the way.
"America's veterans have been well-served for years by VA's appraisal system, and professionals in the business should be proud of their good work," Bradley said. "Unfortunately, that system is under tremendous pressure today."
Currently, 18 percent of recent homebuyers are veterans, and over half of them used a VA loan in the home mortgage, according to NAR's report. However, appraiser willingness to service VA loans is getting in the way of allowing these loans to reach their full market potential. "What we've found is that, among appraisers, there's a real reluctance to work with the VA," Bradley said. "Generally, appraisers are dissatisfied with the level of compensation they're receiving for their work." "It's also harder than ever for trainees to enter the field, not just within the VA system but across the industry, which only adds to the perception of an appraiser shortage," she said. "This overall regulatory burden is a significant issue, and we have to turn things around." In fact, NAR created several charts (www.housingwire.com/articles/39601-charts-nar-survey-breaks-down-problem...) showing the problems affecting the entire appraisal industry.
But there is an added complication when it comes to VA loans. Bradley explained in to the committee that the VA holds one program, reconsideration of value, that allows an appraiser to stop work and notify the lender's point of contact if a property's value is lower than the sale price. Also known as the Tidewater Initiative, Bradley said it is unique to VA transactions and designed to protect the buyer. However, the process often isn't transparent to the buyer or their agent, Brandley said. To improve the program, she reminded the committee that a clear understanding between appraisers, real estate agents and the agents' clients is not only allowable, but should in fact should be encouraged. "What we have today isn't perfect, but it's an important part of ensuring veterans and active-service members are protected when using a VA home loan," Bradley said. "NAR looks forward to working with the VA and members of Congress to improve this system in the years to come." [Source: Housingwire — Kelsey Ramírez — April 5, 2017]
As always please see your local County Veterans Service Officer if you have any questions. You can contact your local VSO at (218) 631-7617 or by email at firstname.lastname@example.org and as always have a great week.