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Question: What are some common questions and scenarios lenders encounter day-to-day in their preparation for FHA’s borrower-initiated Reconsideration of Value (ROV) process?

Answer:

Approved mortgagees must comply with FHA’s ROV procedures for all loans with case numbers assigned on or after October 31, 2024. To prepare lenders, FHA hosted a live webinar in August 2024, during which time FHA subject matter experts addressed questions from attendees. FHA recently published FHA INFO 2024-70, which provides mortgagees with a summary of all questions and answers submitted in relation to the webinar. The questions and answers provide a useful resource to lenders who are implementing their ROV processes and include information related, but not limited to:

• New fields coming to FHAC for the ROV process;
• How to handle ROV requests received after loan denial;
• FHA underwriter and appraiser training; and
• Sellers and other interested parties initiating ROV requests.

Noteworthy, HUD’s Handbook 4000.1, II.A.1 indicates that while a borrower may seek assistance from a real estate agent regarding initiating a ROV request, FHA prohibits a lender from discussing the contents of an appraisal with anyone other than the borrower:

“Communications with Third Parties

The underwriter may request a clarification or reconsideration of value from the Appraiser, following the requirements in Reconsideration of Value. The Mortgagee may not discuss the contents of an appraisal with anyone other than the Borrower.”