New Changes Related to Appraisals

Home Valuation Code of Conduct (HVCC)

As part of a settlement reached between the New York State Attorney General and Washington Mutual, Fannie Mae and Freddie Mac have agreed to adopt a “Home Valuation Code of Conduct”.  The HVCC requires that all institutions delivering loans to Fannie Mae and Freddie Mac comply with the terms of the agreement.  The primary emphasis of the Code it to isolate the appraiser from the possibility of influence or coercion by a lender’s “loan production staff” to deliver a valuation that may be inflated.

What does this mean to consumer who needs financing to purchase a home?  When the lender orders an appraisal they cannot order it directly from the appraiser anymore they have to order the appraisal through an appraisal management company who will then randomly assign the appraisal request to an appraiser who is on the appraisal management company list of approved appraisers.  This my delay loan approvals by two to three days due to the fact that now a third party is now involved in the asset documentation portion of the loan approval and an additional fee may be applied for this service as well.  This is for conventional loans only and does not apply to government insured loans such as FHA.

This is an example of the on-going changes the residential lending industry is going through to re-write how consumers can qualify for a home loan and protect their interest in that investment. For more details you can contact me or your local mortgage banker.

Curt Conkling; curt@curtconkling.com and visit my website at CurtConkling.com

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