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VA Lender Appraisal Review & Rules-Help!. (Friend is looking in Lyon County Nevada?)

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dbsdesk | 25 Jul 2014, 01:45 AM Agree 0
I just got a call from an old friend who is also a Veteran in the process of buying a house in a rural area outside of my state somewhere in Northern Nevada in Zip Code 89429. He mentioned that the appraisal came in and a few things look odd, specifically, the appraiser changed the name of the city the property is in to the same city the comps. used are in and in reviewing the copy he faxed to me the appraiser's certificate shows his VA # and he mentions that he is a member of the National Association of Realtors (sounds like a possible issue of collusion?) Interestingly, the cities use the same Zip Code. I went online to do a quick search on the cities via and pulled a profile via online title reports that I have access to as a mortgage officer since my company services most of the USA.
Comps given for the actual city the subject property is in are in the neighborhood of $20K to $40K below the seller's ask price but in the neighboring city, the comps used by the appraiser inflate the value by those amounts. He says the mortgage officer he is using was told by underwriting that the appraiser needs to correct the city, with no mention of correcting comps. The real estate agent replied back that both cities use the same zip code.
The appraisal looks on the face of it to be the appraiser's way of pumping up an area possibly 'on the other side of the tracks' and due to the length of years in the area, the appraiser very likely knows most of the top agents in the area. I asked my friend for the name of the agent & my online search shows the agent has similar (20+ years) of experience in the area as the appraiser.
It sounds 'fishy' to me, what should I tell my friend and has anyone using VA mortgages to buy property had this sort of situation?
I have never worked VA mortgages before so I'm asking for anyone's help on this because I was unable to find specific VA appraisal rules beyond the Tidewater provision and the right to dispute the appraisal (VA usually appraises lower than borrower's expectations.)
PS: Friend's escrow closes in another couple of weeks.
  • Kathrynp | | 31 Jul 2014, 09:55 AM Agree 0
    The VA underwriter is the person to deal with this problem thru VA. It's the underwriter who has to issue the NOV (Notification of Value) on the appraisal. Here's VA Guidelines from the Lenders Handbook...

    13.02 Resolving LAPP Appraisal Review Problems

    Contact and Cooperation
    LAPP lenders are expected to take reasonable steps to resolve problems detected during their appraisal reviews. While branch office staff and authorized agents may contact the fee 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.

    Additional Information
    When information, methodology or conclusions in the appraisal report require additional clarification or support, the SAR must contact the fee appraiser and obtain the necessary information.

    Appraisal Report Changes
    Any clarification, correction or revision by a fee appraiser to an appraisal report must be in writing, signed and dated. The fee appraiser must clearly identify any revised appraisal 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

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