The Department of Housing and Urban Development is reminding lenders that they are accountable, along with appraisers, for the quality of appraisals on Federal Housing Administration-insured loans.Lenders that submit appraisals that do not meet FHA requirements are subject to the "imposition of sanctions by the HUD Mortgagee Review Board," according to mortgagee letter 2005-06. Last summer, HUD issued a final rule that establishes lenders' accountability for appraisals in cases where they knew or should have known that an appraisal is inaccurate or deficient. The rule went into effect Aug. 19. In a separate mortgagee letter, HUD notified lenders that inherited properties are now exempt from its anti-flipping rule. The flipping rule prohibits lenders from using FHA loans to finance property sales where the seller has owned the property for less than 90 days.

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