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Article Excerpt
Eliminating mortgage broker-ordered appraisals, prohibiting appraiser coercion, and reducing the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages: These are some of the overarching goals of the March 3 agreement among New York Attorney General Andrew Cuomo, government-sponsored enterprises Fannie Mae and Freddie Mac, and their federal regulatory overseer, the Office of Federal Housing Enterprise Oversight. Now, the real estate industry--appraisers in particular--ponders the effects of the agreement and prepares for the proposed changes and any further changes before the final implementation of all the provisions, set for January 1, 2009. As of press time, the GSEs were still weighing the feedback garnered during the comment period. How it all shakes out is anyone's guess, but what we know so far follows.
Key provisions of the March 3 agreement are:
* adoption of the Home Valuation Code of Conduct (reprinted on pages 18 and 19), which is intended to strengthen appraiser independence and prevent lender influence on property appraisals;
* establishment of the Independent Valuation Protection Institute, an independent entity that will establish a hotline for consumers and a contact point for appraisers' complaints.
Since the agreement was announced, appraisers and the rest of the lending industry have been speculating about its ramifications, particularly the HVCC. Scheduled to be implemented by January 1, 2009, the HVCC offers much-needed support for appraiser independence and restraints on mortgage brokers, but it also raises many questions. It is hoped--and on some levels expected--that many of these concerns are being addressed in response to the open...
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