The Federal Housing Administration (FHA) recently released several new Mortgagee Letters, including 2 on focused on appraisals.
ML 2009-37: Flood Zone Requirements and Responsibilities of FHA Mortgagees and Appraisers. Appraisers are required to review the applicable FEMA Flood Insurance Rate Map (FIRM) and make appropriate notations. If the property is in flood zone the appraiser is required to include a flood map with the appraisal report. The appraiser must enter the FEMA zone designation on the reporting form as well as identify the map panel number and map date. If the property is not shown on any map the appraiser should enter “not mapped”.
ML 2009-41: Appraisal Performance Standards and Sanctions. This is largely a reminder of administrative sanctions that FHA may take ranging from a Notice of Deficiency (lowest level sanction) to civil or criminal sanctions (most severe). Appraisers are reminded that they must conform to FHA appraisal requirements and USPAP. Lenders are reminded that they are responsible, along with the appraiser, for the quality and accuracy of the appraisal.