By John Dingeman, Chief Appraiser, Class Valuation 

 In mortgage lending, the Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, stands out as a unique and intricate financial product that demands specialized expertise.  

 Our journey into reverse mortgage appraisals has been far from straightforward. The acquisition of Landmark Network in 2019 was a pivotal moment for our reverse mortgage appraisal capabilities. Landmark was one of the top appraisal management companies in the reverse space, and we've continued to build on that foundation. 

 We process thousands of reverse mortgage appraisals weekly, a testament to our leadership in the HECM space. Our Smart Assign™ technology, which assigns tasks based on location, performance metrics and current capacity, is a game-changer, ensuring that only the most qualified appraisers are matched with these sometimes complex assignments. In other words, we strategically assign these valuations to appraisers with proven expertise in reverse mortgage evaluations. 

 My involvement as Chief Appraiser at Class Valuation goes beyond day-to-day operations. With more than a decade of experience in reverse mortgage work, I also serve as a continuing education instructor on topics including FHA appraisals and maintain regular communication with FHA to stay current on requirements and interpretations. I actively participate in the National Reverse Mortgage Lenders Association (NRMLA) events, ensuring we're always at the forefront of regulatory changes and industry best practices. This combination of hands-on experience, educator insight, and direct engagement with regulators allows us to bring exceptional precision and understanding to this specialized service. 

How HECM Appraisals Differ  

Unlike forward mortgages, reverse appraisals require a level of scrutiny that goes beyond the standard property appraisal. Our approach begins with a fundamental difference in reporting and quality control. Take, for example, property repairs. In a traditional FHA appraisal, repair items might be summarized with a simple lump-sum estimate. Reverse mortgage appraisals, however, require meticulous itemization. We can’t just say repairs cost $2,000 – we need to break down each repair precisely. An electrical issue might be $500, plumbing repairs another $500 and concrete work $1,000.  

This granular approach supports the unique “set-aside” process for reverse mortgages, allowing lenders to allocate funds for potential future repairs.  

In contrast, forward FHA appraisals often move through automated underwriting systems that can overlook important details. Even the most experienced FHA appraisers can miss simple requirements outlined in the FHA Handbook, sometimes due to inattentional blindness — the tendency to overlook critical elements because the process feels routine. Reverse mortgage undewriting eliminates that automation safety net, requiring a deliberate, line-by-line review to ensure every detail is addressed.  

Navigating HECM Regulations 

Many appraisers who have worked exclusively in forward mortgages are stunned by the level of detail required in a reverse mortgage appraisal. What might have been acceptable in traditional appraisals simply cannot pass muster in the reverse mortgage world. 

The FHA Handbook 4000.1 (also known as the Single Family Housing Policy Handbook) serves as our definitive guide, and we follow its requirements. Our approach is a thorough quality control examination that goes far beyond the standard property appraisal. Each line item, observation, and measurement is examined with careful attention to detail. Reverse mortgage appraisers must recognize that these are not routine assignments; they are comprehensive financial assessments that can dramatically impact a senior homeowner's retirement strategy. 

The difference is stark. While forward mortgage appraisals might allow for generalities, reverse mortgage appraisals demand specificity. A $500 electrical repair isn’t just a line item — it’s a precise assessment that can affect loan underwriting. A concrete issue isn’t simply estimated; it must be documented with clear cost implications. 

This level of granularity isn’t optional. It’s mandatory. The learning curve for appraisers shifting from traditional mortgages can be steep and/or frustrating. The FHA handbook isn’t just a suggestion. It’s a detailed roadmap that must be followed with complete accuracy. 

Our team doesn’t just read the guidelines. We internalize them to ensure every reverse mortgage appraisal meets the highest regulatory standards. 

Bringing Sensitivity to Reverse Mortgage Appraisals  

We understand the unique considerations of reverse mortgage appraisals. These aren't just properties. These assignments often involve properties owned by seniors seeking to access their home equity. For this reason, we select appraisers with the technical expertise required for the work and the professionalism to conduct inspections and reporting with respect for the occupants and the property. Each assignment, whether it's a $200,000 home or a $5 million property, is completed in accordance with applicable standards and with a consistent focus on producing credible results. 

Our team understands the nuanced requirements of both FHA and proprietary reverse mortgage products. These products require comprehensive documentation, including interior photographs of outbuildings and detailed property condition assessments. This goes beyond FHA requirements, reflecting the high-stakes nature of these loans. 

As the reverse mortgage market evolves, Class Valuation remains committed to delivering appraisals that are credible, efficient, and conducted with the highest level of professionalism. We’re not just processing assignments; we’re ensuring each appraisal meets all applicable standards and provides the insights needed for well-informed lending decisions. 

For us, reverse mortgage appraisals are more than just another assignment. They represent a specialized service requiring deep expertise, technological innovation and a human touch.  

As Chief Appraiser at Class Valuation, John assists quality control and compliance functions, including appraisal escalations, vendor quality assurance, client concerns, and mandatory reporting requirements. He holds credentials as a Certified Residential Appraiser in 12 states and is a Registered Property Tax Agent in Arizona. Additionally, John serves as a Qualifying and Continuing Education Instructor for McKissock Learning.