|
 
June 2009
Index of all
past
Affiliate Corner columns
Home valuation code of conduct now in effect
By Ann Bagwell,
Chase Home Finance
The new “Home Valuation Code of Conduct” is now about a month old. This new code is aimed at improving the reliability of the home appraisal process in the mortgage finance industry.
Fannie Mae and Freddie Mac (the Agencies) entered into an agreement with their regulator, the Federal Housing Finance Authority, and the New York Attorney General’s office to adopt certain policies for appraisals for loans that are delivered by lenders to the Agencies. As a result, the Home Valuation Code of Conduct (the Code) was adopted and agreed to be implemented May 1, 2009. Lenders must represent and warrant the appraisal conducted in connection with single family (one- to four-unit) mortgage loans, other than government insured and guaranteed loans, with application dates on or after May 1, 2008 to conform to the Code.
Lenders obtaining bond backing from Fannie Mae for their FHA loans are subject to the same Code.
So ALL lenders including mortgage brokers must use an outside vendor service to order their appraisals. The vendor service is committed to maintaining appraiser independence and prohibits conditions, arrangements or communications that infringe or may appear to infringe on independence of the appraisal process. All employees of the mortgage company are prohibited from influencing or attempting to influence the development, reporting, result or review of an appraisal or from taking any action that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality. In fact, the employees do not know who the appraiser is until the appraisal is received. Direct communication with the appraiser is limited to underwriting, vendor management and credit risk personnel.
An appraiser must be, at minimum, licensed or certified by the state in which the property to be appraised is located.
What does this mean to REALTORS® and buyers? Allow more time in the contract for the appraisal completion date. Lenders would recommend to listing agents that there is a better tracking method when the lock box number is given to the appraiser. This will allow for easier follow up and fewer delays.
|
