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U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

August 10, 1990
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 90-28
     TO:  ALL APPROVED MORTGAGEES
     SUBJECT: Single Family Production - Field Review of Appraisals
                 Involving Former HUD-Owned Properties
 
          The purpose of this letter is to clarify instructions
     contained in Paragraph 3-3, G., Handbook HUD 4000.4 REV 1, and
     Direct Endorsement Update 87-1 concerning the field review.
 
          Present HUD policy requires that the appraisal of any former
     HUD owned property-must be field reviewed by HUD or the Direct
     Endorsement Lender if the current value of the property exceeds
     the sales price at which HUD sold it by 10 percent of more. This
     review should be performed only on cases that have been sold by
     the Department within the past year and must be performed by
     qualified persons such as a Direct Endorsement Underwriter, a
     private appraiser that is knowledgeable about HUD appraisal policy
     gr a person from the Mortgagee's quality control department that
     is knowledgeable about HUD appraisal policy. It is not the intent
     of HUD for a DE approved lender to hire a private sector appraiser
     who may not be familiar with HUD appraisal policy.
 
          In instances where it is infeasible for a DE Underwriter to
     perform the required review (property located in New York and the
     Underwriter in California); there is no qualified person in the
     lenders quality control department; or there are no private
     contract appraisers knowledgeable about HUD appraisal policy, the
     lender should contact the local HUD Field Office for a list of fee
     field review appraisers to use to perform the field review.
 
          The amount of the fee for this review is the fee established
     for an interior field review in the HUD Field Office having
     jurisdiction over the area where the property is located. Lenders
     may not charge more than this fee to the purchaser. Also, it is
     the responsibility of the lender to pay the fee field review
     appraiser upon presentation of bills for services rendered.
 
_____________________________________________________________________
 
                                   2
 
     If you have any questions concerning this letter, please
contact the Single Family Technical Support and Valuation Branch
in HUD Headquarters at (202) 708-2720.
 
                           Very sincerely yours,
 
                           _________________________________
                           C. Austin Fitts
                           Assistant Secretary for
                             Housing-Federal Housing Commissioner