Fannie Mae & Freddie Mac’s Appraisal Rules
August 26, 2009
Congress is taking a break until after Labor Day, but things are boiling over the Fannie Mae and Freddie Mac’s appraisal rules. The rules of course are very controversial or we would not be talking about Capital Hill.
If it were up to Bipartisan legislation, the Home Valuation Code of Conduct would be put on a shelf and left for 18 months and this idea is actually getting new sponsors, which is not at 54.
The National Association of Realtors is pushing for the Home Valuation Code of Conduct bill in the key congressional representatives’ home district during the recess. The National Association of Realtors is very critical of the Home Valuation Code of Conduct rules with their side stating the rules “produce deal-killing lowball appraisals, encourage the use of low-paid appraisers unfamiliar with local conditions, and have raised the cost of valuations for consumers.”
Along with the National Association of Realtors, appraisers, mortgage brokers, and home builders are also against the rules. The Home Valuation Code of Conduct took effect on May 1.
David Stevens the FHA commissioner recently presented the first public comment from HUD, which was, the FHA account for close to 1/3 of mortgage market volume and does not have any plans to adopt the Home Valuation Code of Conduct. He went on to explain that FHA has its own guidelines and standards that cover appraisers and appraisals. A few weeks later, Stevens did comment that some of the core principles of the guideline were good.
Stevens stated, “We do like the HVCC’s separation of influence in ordering the appraisal from those who financially benefit from the outcome.” He did say that FHA will not use the Home Valuation Code of Conduct but may incorporate some of the principles.
The goal of FHA as stated by Stevens “is to get changes into the marketplace in the near future.” This is a hint that FHA may soon be presently new guidelines on home valuations, which will of course affect realty agents, appraisers, consumers, and lending companies. No details of any of the changes are available at this time.
Labor Day is fast approaching and Capital Hill will be a buzz before long. The bill only has 54 supporters and with all the discord among the politicians, REALTORS, home owners, and lending companies, I doubt if we will see any changes yet, as they will more than likely more on to more pressing issues such as health care.
