Deciphering the VA Lender’s Handbook Chapter 13 Part 3
The acronym ‘LAPP’ stands for Lender Appraisal Processing Program. If a lender has signed up and been approved for LAPP, then they can have an appraisal reviewer on staff that reviews appraisals rather than having to send appraisals to the VA for review. The appraisal reviewer on staff must be VA-authorized and is called the Staff Appraisal Reviewer (SAR). What we’re going to go over in this article is how problems that the SAR discovers in an appraisal are addressed. Why are we covering this? Because it can be extremely frustrating if your VA loan has been delayed for over a week and all your loan officer can tell you is “there were issues with the appraisal”. It’s very helpful to not only know basically what’s going on without having to ask, but also knowing the right questions to ask – you may not be able to contact the SAR directly, but you can at least ask the right questions to your loan officer and find out what the hang-up is.
The VA expects the lender’s SAR to make a reasonable effort to resolve any problems they find directly with the appraiser. The SAR is also the only person at the lender’s office that is authorized to contact the appraiser with issues relating to the valuation of the property. The appraiser is expected to cooperate with the SAR in addressing any concerns about the content of their report and the timeliness with which it was prepared. In most cases, the SAR just requests additional information from the appraiser on how the valuation was reached, and when the appraiser clarifies why they did what they did, the problem is solved. Any time any additional information is added, something is clarified, or a correction or revision is made, the change must be done in writing and be signed and dated. The VA takes this very seriously – if a lender fails to attach the change to the appraisal report, the VA may take administrative action against the lender.
Occasionally, there is an issue with the appraisal report that the SAR and the appraiser are unable to work out. In cases like these, the SAR must contact the local VA office and provide the following:
- 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
This doesn’t happen very often, but when it does, the VA will evaluate the information the SAR sends over and come to a decision. The VA will then notify all the appropriate parties (which may or may not include you) and document the incident appropriately. In some (but not all) cases, the VA staff will review the appraisal report and issue a VA Certificate of Reasonable Value. In other cases, the VA will come to a decision on the issue in dispute, then send the report back to the SAR for issuance of a Notice of Value. Any and all complaints the SAR has about the property condition or the appraiser’s performance must be referred directly to the VA.
The VA is always interested in making sure that VA loans are processed in a timely manner, and the VA appraisal is no exception to this rule. The VA requests notification from the SARs if an appraiser is not meeting timeliness expectations, and the lender is required to resolve any timeliness problems in processing related to their own personnel.
The last thing you should know on this topic is that the VA expects their offices to be consistent regarding conditions and requirements for the Notice of Value. VA offices should also notify LAPP lenders by posting any changes to their requirements that only apply locally because a local situation necessitates the change. VA offices being consistent is important in order to maintain a level of fairness to all the veterans who participate in the VA loan program. Consistency also helps make the process go faster as lender’s can anticipate what the VA will say and do in response to a certain situation, and the VA doesn’t have to go through a decision-making process for every question that comes up.