#### Chapter 1

####  Fee Personnel

#### Overview

+------------+---------------------------------------------------------+
| ##### In   | > This chapter contains information about the           |
| troduction | > Department of Veterans Affair's (VA's) use of fee     |
|            | > appraisers, fee compliance inspectors and other       |
|            | > technical fee personnel.                              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > This chapter contains the following topics.           |
| #### In th |                                                         |
| is Chapter |                                                         |
+------------+---------------------------------------------------------+

+-------------------------------------------------------+--------------+
| ###### Topic                                          | #            |
|                                                       | ## See Page  |
+-------------------------------------------------------+--------------+
| 1.01 Fee Panels and Fee Personnel                     | 1-2          |
+-------------------------------------------------------+--------------+
| 1.02 Fee Panel Qualification Requirements             | 1-3          |
+-------------------------------------------------------+--------------+
| 1.03 Fee Panel Appointment Process                    | 1-5          |
+-------------------------------------------------------+--------------+
| 1.04 Conflicts of Interest                            | 1-8          |
+-------------------------------------------------------+--------------+
| 1.05 Exemption to E-Appraisal                         | 1-10         |
+-------------------------------------------------------+--------------+
| 1.06 Fee Personnel/Performance Files                  | 1-11         |
+-------------------------------------------------------+--------------+
| 1.07 VA Use of Other Technical Fee Personnel          | 1-12         |
+-------------------------------------------------------+--------------+
| 1.08 Fee Personnel Training                           | 1-13         |
+-------------------------------------------------------+--------------+

#### 

#### 1.01 Fee Panels and Fee Personnel

+------------+---------------------------------------------------------+
| ##### F    | > Each VA office will appoint and maintain a panel of   |
| ee Panels  | > fee appraisers and a panel of fee compliance          |
|            | > inspectors to conduct appraisals and inspections for  |
|            | > VA Loan Guaranty program purposes.                    |
|            | >                                                       |
|            | > The same individual may be appointed to both fee      |
|            | > panels, if qualified.                                 |
|            | >                                                       |
|            | > Each fee panel will contain enough members to         |
|            | > accommodate all appraisal and inspection requests     |
|            | > expeditiously. A qualified list of appraisers and     |
|            | > compliance inspectors must be maintained through such |
|            | > recruitment sources as newspaper advertisements,      |
|            | > local appraisal organizations, state appraisal        |
|            | > license and/or certification rosters, etc.            |
|            | >                                                       |
|            | > *Qualified* VA staff may perform appraisals and       |
|            | > inspections for VA loan guaranty purposes, if         |
|            | > necessary, in the absence of qualified fee personnel. |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | Fee personnel are independent business people. As such, |
| #### Fee P | they are responsible for the quality of their work.     |
| ersonnel A |                                                         |
| re Not VA  | As independent business people, VA fee personnel are    |
| Employees  | primarily responsible for the billing and collecting of |
|            | appraisal/inspection fees. C&V staff at the local       |
|            | Regional Loan Center (RLC) will provide assistance for  |
|            | those overdue billings when requested with documented   |
|            | past collection attempts.                               |
|            |                                                         |
|            | Although fee personnel are not VA employees, they must  |
|            | be given due process prior to any VA administrative     |
|            | action being taken against them unless he/she is still  |
|            | within the 1 year probationary period on the panel,     |
|            | during which he/she can be removed at the discretion of |
|            | the VA office Director.                                 |
|            |                                                         |
|            | *Reference:* See Section 6.08, VA Administrative        |
|            | Sanctions Against Program Participants.                 |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | VA offices will provide a copy of their list of fee     |
| Informatio | panel members to the Department of Housing and Urban    |
| n Sharing  | Development or Rural Housing Service, upon request.     |
+------------+---------------------------------------------------------+

#### 

#### 1.02 Fee Panel Qualification Requirements

+------------+---------------------------------------------------------+
| ##### L    | An appraiser or inspector must meet all of the          |
| ist of Req | following qualification requirements prior to           |
| uirements  | appointment to a VA fee panel:                          |
|            |                                                         |
|            | -   At least *5 years of* *experience* (in the type of  |
|            |     work that would qualify the applicant to            |
|            |     competently perform the required duties in the      |
|            |     area(s) where the applicant wishes to work) for     |
|            |     appraisers, and 3 years experience for inspectors.  |
|            |                                                         |
|            | -   Appraisers must be currently licensed or certified  |
|            |     by the State.                                       |
|            |                                                         |
|            | -   Inspectors must meet local or State licensing or    |
|            |     certification requirements, if any.                 |
|            |                                                         |
|            | -   *Good character* (no indication of any cause for    |
|            |     embarrassment or adverse publicity for VA).         |
|            |                                                         |
|            | -   *Not currently employed by the Federal Government   |
|            |     or a quasi-governmental organization* (such as      |
|            |     Fannie Mae, Freddie Mac, Postal Service, etc.). May |
|            |     be a local or State government employee if no       |
|            |     conflict of interest (or the appearance of a        |
|            |     conflict of interest) with VA assignments.          |
|            |                                                         |
|            | -   *No other conflict of interest* between current     |
|            |     employment or other position or private pursuits    |
|            |     and VA assignments.                                 |
|            |                                                         |
|            |     ***Reference:*** See Section 1.04 Conflicts of      |
|            |     Interest                                            |
+------------+---------------------------------------------------------+

Continued on next page

1.02 Fee Panel Qualification Requirements, Continued

+------------+---------------------------------------------------------+
| ##### L    | -   With regard to *VA testing*:                        |
| ist of Req |                                                         |
| uirements  | 1.  Appraisers must provide a satisfactory              |
|            |     demonstration appraisal (on the Uniform Residential |
| (          |     Appraisal Report form) to include a certification   |
| continued) |     that no assistance was received in completing the   |
|            |     report. Note: Appraisers should be able to          |
|            |     electronically transmit their demonstration         |
|            |     appraisal as a Portable Document Format (PDF) file  |
|            |     via e-mail (e-commerce).                            |
|            |                                                         |
|            | 2.  Compliance inspectors must provide a satisfactory   |
|            |     demonstration inspection (on VA Form 26-1839,       |
|            |     Compliance Inspection Report) and pass a written    |
|            |     test that measures the applicant's knowledge of     |
|            |     construction techniques and terminology.            |
|            |                                                         |
|            | -   ***Note:*** VA offices will furnish appropriate     |
|            |     information and instructions prior to testing.      |
|            |     Appraisers will be advised if electronically        |
|            |     transmitted e-mail appraisals as PDF files are      |
|            |     required and if required, specific e-mail           |
|            |     submission instructions will be given.              |
|            |                                                         |
|            | .                                                       |
|            |                                                         |
|            | VA offices will use the Credit Alert Interactive Voice  |
|            | Response System (CAIVRS) to screen each applicant for   |
|            | delinquent Federal debts. *Satisfactory arrangements    |
|            | must be made to repay any delinquent debt to the        |
|            | Federal Government*.                                    |
+------------+---------------------------------------------------------+

#### 

#### 1.03 Fee Panel Appointment Process

+------------+---------------------------------------------------------+
| ##### Fe   | An applicant must complete and submit the following to  |
| e Panel Ap | the VA office of jurisdiction over the area in which    |
| plication  | he/she wishes to work:                                  |
|            |                                                         |
|            | -   VA Form 26-6681, Application for Fee Personnel      |
|            |     Designation, and                                    |
|            |                                                         |
|            | -   Letters of reference:                               |
|            |                                                         |
|            |     -   Appraisers: Three letters required, at least 2  |
|            |         of which must be from licensed or certified     |
|            |         appraisers attesting to the applicant\'s        |
|            |         qualifications using references listed on the   |
|            |         application. (38 USC 3731(a)(1))                |
|            |                                                         |
|            |     -   Inspectors: Submit 3 letters attesting to the   |
|            |         applicant\'s qualifications as an inspector     |
|            |         using the references listed on the application. |
+------------+---------------------------------------------------------+
| #          |                                                         |
| ####  {#se |                                                         |
| ction-3 .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | Upon receipt of an application, the VA office will      |
| ## Initial | initially notify the applicant acknowledging its        |
|  VA Proces | receipt within 5 working days. The VA office will       |
| sing of Ap | review the application in a timely manner, and then     |
| plication  | notify the applicant by letter. The letter will either  |
|            | state that the applicant:                               |
|            |                                                         |
|            | -   Does not meet a basic qualification requirement     |
|            |     (e.g., experience, licensing/certification,         |
|            |     conflict of interest) and name the specific         |
|            |     requirement(s), or                                  |
|            |                                                         |
|            | -   Meets the basic requirements and is being           |
|            |     considered, along with other eligible applicants.   |
|            |     This letter may also initiate testing, request the  |
|            |     applicant's Social Security Account Number (if not  |
|            |     already provided) for CAIVRS screening, or request  |
|            |     or provide other information.                       |
+------------+---------------------------------------------------------+

Continued on next page

1.03 Fee Panel Appointment Process, Continued

+------------+---------------------------------------------------------+
| ##### VA   | Every VA office will have a Fee Panel Committee         |
| Selection  | consisting of:                                          |
| of Fee Pan |                                                         |
| el Members | -   Loan Guaranty Officer (Committee Chairperson),      |
|            |                                                         |
|            | -   Assistant Loan Guaranty Officer (or other qualified |
|            |     employee designated by the Loan Guaranty Officer),  |
|            |     and                                                 |
|            |                                                         |
|            | -   Valuation Officer (VO) or other qualified employee  |
|            |     designated by the VO.                               |
|            |                                                         |
|            | When a VA office determines a need for an additional    |
|            | fee person in an area, the Fee Panel Committee will:    |
|            |                                                         |
|            | -   Review the pending applications,                    |
|            |                                                         |
|            | -   Determine who is best qualified, and                |
|            |                                                         |
|            | -   Make a recommendation to the Director.              |
|            |                                                         |
|            | Note: Valuation Officer must include documentation in   |
|            | the personnel file of each selected applicant           |
|            | confirming the required experience and training of the  |
|            | selected candidate meets all requirements for the       |
|            | position to which they are being appointed.             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### VA   | The VA letter to the individual selected for the fee    |
| Notice of  | panel will:                                             |
| Fee Panel  |                                                         |
| Selection  | -   Welcome him/her to the fee panel,                   |
|            |                                                         |
|            | -   Remind him/her of the responsibilities regarding    |
|            |     quality of work and demeanor when representing the  |
|            |     agency,                                             |
|            |                                                         |
|            | -   State that the first year on the panel is a         |
|            |     probationary period, during which he/she can be     |
|            |     removed at the discretion of the VA office          |
|            |     Director.                                           |
|            |                                                         |
|            | -   Include a "training kit" of reference material      |
|            |     regarding applicable VA requirements (e.g., VA      |
|            |     Lender's Handbook Chapters 10 through 17 and        |
|            |     locally developed training material) and a list of  |
|            |     frequently encountered errors for appraisers and/or |
|            |     inspectors, and                                     |
|            |                                                         |
|            | -   Be signed by the VA office Director.                |
|            |                                                         |
|            |     VA offices *may* require fee personnel to use VA    |
|            |     Form 26-8709, Identification Card For Loan Guaranty |
|            |     Fee Personnel. A photograph of the fee person can   |
|            |     be laminated in the area designated as "Fee         |
|            |     Personnel".                                         |
+------------+---------------------------------------------------------+

Continued on next page

#### 1.03 Fee Panel Appointment Process, Continued 

+------------+---------------------------------------------------------+
| #####      | Direct VA labor hours spent processing fee panel        |
|  VA Work M | applications may be reported as "Other Measured Hours"  |
| easurement | for work measurement purposes.                          |
+------------+---------------------------------------------------------+

####  

#### 

#### 1.04 Conflicts of Interest

+------------+---------------------------------------------------------+
| ##### Co   | The Federal Government or a quasi-governmental          |
| nflicts of | organization (such as Fannie Mae, Freddie Mac, Postal   |
|  Interest  | Service, etc.) must not currently employ VA fee         |
| Prohibited | personnel. The fee panel member may be a local or State |
|            | government employee if no conflict of interest (or the  |
|            | appearance of a conflict of interest) with VA           |
|            | assignments.                                            |
|            |                                                         |
|            | VA fee personnel must not engage in any private pursuit |
|            | that could result in either:                            |
|            |                                                         |
|            | -   Conflict between the fee person's private interests |
|            |     and his/her VA fee panel responsibilities,          |
|            |                                                         |
|            | -   Bias of his/her judgment as a VA fee panel member,  |
|            |     or                                                  |
|            |                                                         |
|            | -   Use of information obtained through a VA assignment |
|            |     to the detriment of the Government or veterans.     |
|            |                                                         |
|            | VA fee appraisers who are also staff appraisers for     |
|            | Department of Housing and Urban Development (HUD)       |
|            | Direct Endorsement (DE) lenders must:                   |
|            |                                                         |
|            | -   Disclose that fact to VA and                        |
|            |                                                         |
|            | -   Not accept VA assignments on properties in which    |
|            |     their employer has an interest.                     |
+------------+---------------------------------------------------------+

Continued on next page

1.04 Conflicts of Interest, Continued

+------------+---------------------------------------------------------+
| ##### VA   | If there is an indication that a fee panel member's     |
|  Oversight | private pursuits/interests conflict with VA             |
|            | requirements:                                           |
|            |                                                         |
|            | -   He/she will be promptly notified, and               |
|            |                                                         |
|            | -   VA will immediately take appropriate action (e.g.,  |
|            |     withdrawal of pending assignments and/or            |
|            |     withholding of further assignments) pending outcome |
|            |     of an investigation.                                |
|            |                                                         |
|            | When appropriate, VA will administratively sanction the |
|            | fee person.                                             |
|            |                                                         |
|            | ***References:***                                       |
|            |                                                         |
|            | -   Section 6.08                                        |
|            |                                                         |
|            | -   Chapter 17 of the Lender's Handbook                 |
+------------+---------------------------------------------------------+

#### 1.05 Exemption from E-Appraisal 

+------------+---------------------------------------------------------+
| ##### Jus  | An exemption from the requirement that VA fee           |
| tification | appraisers submit their appraisal reports via           |
|            | E-Appraisal may be granted in the following situations: |
|            |                                                         |
|            | -   The appraiser is assigned a geographic area that    |
|            |     generates few requests for VA appraisals (typically |
|            |     1 or 2 a month) and                                 |
|            |                                                         |
|            | -   There is a lack of qualified appraisers in the area |
|            |     and it is in the best interest of VA to retain the  |
|            |     appraiser and                                       |
|            |                                                         |
|            | -   The appraiser requests an exemption based on        |
|            |     hardship and it is in the best interest of VA to    |
|            |     retain the appraiser.                               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | If exemption from E-Appraisal is granted, the appraiser |
| Distributi | must send the appraisal by overnight mail delivery to:  |
| on by Over |                                                         |
| night Mail | -   VA (Individual/IND or Liquidation/LGI cases).       |
|            |                                                         |
|            | -   Lender Appraisal Processing Program (LAPP) lenders  |
|            |     (LAPP cases).                                       |
|            |                                                         |
|            | -   Requesters for liquidation appraisals with          |
|            |     Portfolio Loan/LPL prefix.                          |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Requesters for liquidation appraisals with the      |
|            |     annotation Servicer Loss Mitigation Program or      |
|            |     "SLMP", that requests E-Commerce submission.        |
|            |                                                         |
|            | Note: In LAPP, LPL, or SLMP cases, a copy of the        |
|            | appraisal must be mailed to the VA. In these cases,     |
|            | regular mail may be used.                               |
|            |                                                         |
|            | ***Reference:*** VA Lender's Handbook, VA Pamphlet      |
|            | 26-7, Sections 10.04 and 11.05                          |
+------------+---------------------------------------------------------+

#### 1.06 Fee Personnel/Performance Files

+------------+---------------------------------------------------------+
| ##### Fil  | VA offices will maintain a personnel/performance file   |
| e Contents | for each fee panel member in FileNet.                   |
|            |                                                         |
|            | The file will contain:                                  |
|            |                                                         |
|            | -   The application to the fee panel.                   |
|            |                                                         |
|            | -   All correspondence or other documentation           |
|            |     concerning appointment to the fee panel (including, |
|            |     but not limited to tests, reference letters, etc.). |
|            |                                                         |
|            | -   Evidence of current license or certification        |
|            |     (electronically or otherwise) and evidence of       |
|            |     inclusion in the (The Appraisal Subcommittee of the |
|            |     Federal Financial Institutions Examination Council) |
|            |     ASC National Registry. The registry can be found at |
|            |     [www.asc.gov](http://www.asc.gov/),                 |
|            |                                                         |
|            | -   Detailed documentation regarding work assignments,  |
|            |     including copies of letters, records of telephone   |
|            |     conversations and personal contacts, etc.,          |
|            |     regarding the quality and timeliness of the fee     |
|            |     member's performance, and                           |
|            |                                                         |
|            | -   Correspondence or documentation concerning any      |
|            |     temporary or permanent removal from the fee panel   |
|            |     for any reason.                                     |
|            |                                                         |
|            | ***Note:*** All pertinent documentation regarding work  |
|            | assignments and disciplinary actions should be retained |
|            | in the file.                                            |
+------------+---------------------------------------------------------+

#### 1.07 VA Use of Other Technical Fee Personnel 

+------------+---------------------------------------------------------+
| #          | VA offices may use engineers, architects, or other      |
| #### Who M | technical experts as needed on a contractual fee basis. |
| ay Be Used |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### O    | All fee personnel are independent business people, not  |
| ther Techn | VA employees. As such, they are responsible for the     |
| ical Fee P | quality of their work.                                  |
| ersonnel A |                                                         |
| re Not VA  |                                                         |
| Employees  |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### Pa   | Contracts with fee personnel must be written to:        |
| yment Cons |                                                         |
| iderations | -   Avoid any provision that would tend to establish an |
|            |     employee-employer relationship, and                 |
|            |                                                         |
|            | -   Provide for payment per job, as opposed to a per    |
|            |     diem rate.                                          |
|            |                                                         |
|            |     Contract costs must be paid by the *builder* if the |
|            |     need for the service is attributable to acts or     |
|            |     failures for which the builder is responsible       |
|            |     (e.g., inadequate engineering data, etc.).          |
|            |                                                         |
|            |     Contract costs can be paid by *VA* if the facts in  |
|            |     the case indicate that the need for the service is  |
|            |     either:                                             |
|            |                                                         |
|            | -   Essential to fulfill VA responsibilities,           |
|            |                                                         |
|            | -   The consequence of actions or omissions of VA       |
|            |     staff, or                                           |
|            |                                                         |
|            | -   Otherwise in VA's interest.                         |
|            |                                                         |
|            |     When contract costs are paid by VA:                 |
|            |                                                         |
|            | -   Payment must be made from VA funds allotted for     |
|            |     miscellaneous contractual services, and             |
|            |                                                         |
|            | -   Funds must be formally obligated prior to           |
|            |     authorization to proceed with the assignment.       |
|            |                                                         |
|            | Contract costs can be paid by *both VA and the builder* |
|            | if the need for the service is properly allocable to    |
|            | both VA and the builder. In this situation, VA will     |
|            | make the decision regarding distribution of the costs   |
|            | based on the facts in the case.                         |
+------------+---------------------------------------------------------+

#### 1.08 Fee Personnel Training 

+------------+---------------------------------------------------------+
| ####       | To ensure that appraisal and compliance inspection      |
| # Quality  | reports continue to meet VA expectations, communication |
| Assurance  | between the fee personnel and VA is essential.          |
|            |                                                         |
|            | VA staff must hold and document annual meetings with    |
|            | fee appraisers and compliance inspectors. These         |
|            | meetings ideally would be conducted in an open forum    |
|            | where information and ideas may be freely exchanged.    |
|            | However, where not practicable, private meetings may be |
|            | conducted. During these meetings VA staff should:       |
|            |                                                         |
|            | Provide training on any changes in the                  |
|            | appraisal/inspection requirements or program            |
|            | requirements.                                           |
|            |                                                         |
|            | -   Furnish updated training manuals/materials.         |
|            |                                                         |
|            | -   Discuss timeliness requirements and customer        |
|            |     service initiatives.                                |
|            |                                                         |
|            | -   Answer any questions the appraiser/compliance       |
|            |     inspector may have, and                             |
|            |                                                         |
|            | -   Consider any suggestions made by the appraisers and |
|            |     compliance inspectors.                              |
|            |                                                         |
|            | Additional meetings may be appropriate depending on     |
|            | circumstances. Lack of travel funds should not be       |
|            | considered an acceptable reason for not holding such    |
|            | meetings. Alternative meeting methods may be            |
|            | considered; i.e., video conferences, online video       |
|            | meetings etc.                                           |
+------------+---------------------------------------------------------+