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AppraiserLoft Blog I Appraisal Industry News |
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« Chicago Lawyer Seeking Class Actions over HELOCs Against Wells Fargo, Chase, Others | Home | AppraiserLoft Positions Itself as a Leader in Achieving Compliance with FHA’s January 2010 Appraisal Rules » Freddie Mac: Home Valuation Code Has Improved Appraisal QualityBy AppraiserLoft Team | October 20, 2022 By Brad Finkelstein, National Mortgage News Patricia McClung, Freddie’s vice president of offerings management, said at the Mortgage Bankers Association’s convention here last week that of the appraisals the government-sponsored enterprise receives, 15% more have come acceptably close to the automated valuation model it runs as a check. The improved quality of mortgages bought by Freddie and Fannie Mae reduces the repurchase risk for mortgage lenders because of lower defect rates, she said. The code, which took effect May 1 for all loans bought or guaranteed by Freddie or Fannie, has sparked controversy. It bars mortgage brokers and loan officers from ordering appraisals, which might give them leverage to pressure the appraiser to overstate the home’s value. Many lenders have outsourced the ordering of this work to appraisal management companies. Mortgage brokers and real estate agents have accused these companies of inhibiting a housing-market recovery by hiring appraisers who are inexperienced or unfamiliar with the neighborhoods they work in and thus produce faulty, lowball valuations. Ezzard Alves, Fannie’s director of credit risk, said at the conference that several myths exist about the code. One is the notion that it bars all communication with the appraiser. In fact, the code permits a lender or authorized third party to contact an appraiser with additional information, to seek an explanation for a valuation, or to correct a factual error, he noted. Appraisals are low simply because values are declining, which was happening before the code took effect, Alves said. As for the claim that management companies are using "out-of-area" appraisers, he said, Fannie and Freddie require the use of appraisers who know the local market. For complete story, click here: http://tinyurl.com/yzrhfqg Topics: Appraisal Regulations | No Comments » CommentsYou must be logged in to post a comment. |
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