NAR sent a letter to the Federal Housing Finance Agency (FHFA), as well as to Fannie Mae and Freddie Mac (collectively the GSEs), commenting on the recent decision by Fannie Mae and Freddie Mac to allow for data-based valuations rather than traditional in-person appraisals in certain purchase transactions.
Analysis suggests that while industry constraints may improve in the short-run, the long-term constraints are significant. Neither expanded training of new entrants nor automation alone will solve anticipated growth in demand on the appraisal industry.
Since it took effect May 1, 2009, the Home Valuation Code of Conduct (HVCC) has generated significant commentary among real estate professionals, appraisers, and lenders—as well as plenty of uncertainty over exactly what the agreement does and does not allow. The HVCC is a set of guidelines to curb inaccurate appraisals developed by New York Attorney General Andrew Cuomo and the two secondary mortgage market companies Fannie Mae and Freddie Mac, with support from their regulator, the Federal Housing Finance Agency. In general, the guidelines seek to ensure an arm’s length relationship between the lender making a loan and the appraiser who assigns a value to the house. It also sets forth a process for addressing incidences in which appraisal misconduct is suspected. Test how much you know about the new appraisal guidelines.
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