Deciphering the VA Lender’s Handbook Chapter 13 Part 8
Requesting a change to Notice of Value (NOV) that has been issued by either the VA or the Lender’s SAR can sometimes be hard to keep track of after you submit the request. It can be difficult to keep track of who is supposed to do what. The comforting thing to remember is that most of it will happen behind the scenes and not require much involvement from you beyond the initial change request. However, there is a chance you might be involved, and it is good to get your expectations and understanding correct. This article is dedicated to making it clear to you who does what and what role each party plays in processing a change request. We’ll cover the lender, the appraiser, the VA, and the borrower.
The lender can directly process a request for an amended NOV if:
- the lender is part of LAPP (ask your lender to find out if they are)
- the change request is not for more than 5% of the current valuation.
What it means for a lender to be able to directly process a request is that the information provided by the requester, discovery of additional information by the SAR, or information provided by the appraiser along with a recommendation for an increase of value can be taken into account and incorporated into an amended NOV by the lender. In cases that don’t fit the two criteria above, the only role the lender has is to submit the request to either the appraiser or the VA and make an amended NOV after receiving an authorization from the VA to do so.
The appraiser’s role is outlined with a little more detail in the Handbook. The appraiser can be involved with change requests for less than 5% of the valuation if their input is needed, but if the change request is for 5% or more, but less than 10%, the appraiser must be involved and will do the majority of the processing on their end. The appraiser is required to do the following:
- record on the request the date that it was received (for VA timeliness calculation purposes)
- review the request and any supporting documentation
- prepare a written recommendation, with justification that would be considered adequate and reasonable by professional appraisal standards, and
- forward the recommendation to either the
- lender, if the lender is LAPP and the change is not for more than 5%, or
- VA office of jurisdiction, in all other cases.
If the change request is justified by market data that was not available at the time of the appraisal, the appraiser may charge a reasonable fee for processing the change.
The VA will get involved with a change request under two circumstances: they receive a request from the lender to change an NOV (for cases where the change being requested is over 10%), or a recommendation from an appraiser regarding a change to an NOV (for cases over 5% change, and for lenders that are not part of LAPP). When the VA receives the change request, they will do the following:
- review the material received,
- contact the fee appraiser, if necessary, and otherwise determine if the requested change is justified, and
- notify the lender of VA’s decision.
So that is a fairly thorough explanation of the roles that each party plays when taking care of a change request. As you can see, a change request may have to go from the lender to the appraiser to the VA then back to the lender before it reaches you again. Because of this, change requests can take a lot of time, which brings us to the last party’s role in all of this: the borrower.
Your role might be to find the market data or information that justifies a change. If you are not the party that submitted the change request, your biggest role is going to be to be patient. None of the parties involved are interested in sabotaging your attempts to purchase a new home, and they all are going to do their best based on their workload and the information provided to process the change as accurately and quickly as they can.