To stem the rise in what it called appraisal bias in reverse mortgage applications, the Federal Housing Administration (FHA) recently announced that it will require a second appraisal any time it suspects a home’s value has been overestimated when being considered for a Home Equity Conversion Mortgage (HECM).
The agency was scant on details about its evaluation methodology during a media conference call. However, FHA Commissioner Brian Montgomery said the agency would be looking for patterns among individual lenders, using unique attributes of its assessment tools.
Find out more about findings that led to the FHA’s new appraisal requirements and what Montgomery had to say about the move.