This is a new one for me and I'm wondering if anyone else has had this happen.

FHA transaction with one lender. ATP letter received from FHA. Closing delayed as a tax lien popped up on the final sweep for title approval. FHA has signed off on paying the tax lien and we resubmit for an approval letter. Lender orders a BPO, to "validate the appraised value" prior to approval. Negotiator states this is an FHA requirement.

Has anyone else run into this? I've never run into this on previous transactions, but understand that things are always changing. My contact at HUD (who has been great, BTW) is off on holiday this week so I'm still waiting for her response. Any insight would be appreciated.

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Yes. Effective 10-1-13 both an FHA As-is Appraisal and a BPO are required.  Read Mortgagee Letter 2013-23.

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