In response to the current state of the real estate market, appraisal practices have come under scrutiny -- during the boom, appraisers routinely signed off on a doubling and tripling of home values. To prevent any further misconduct, Fannie Mae and Freddie Mac announced revisions to their Home Valuation Code of Conduct -- effective May 1, 2009.
Lenders that sell their loans to Fannie Mae and Freddie Mac will be required to follow new guidelines. The biggest change -- mortgage brokers and realtors will no longer be able to choose their own appraisers. Licensed appraisers will be selected by the lender. This will make the appraisal process more impartial, as lenders have no influence over appraisers. If lenders have their own in-house appraisers, the new code of conduct will prevent the loan-origination department from influencing the appraiser's decision or supervising their work.
If you are a licensed appraiser, you will most likely be affected by these upcoming appraisal changes. As Fannie Mae and Freddie Mac are such loan giants, the new code will affect most appraisers nationwide. Lenders who operate independently do not have to follow the new rules; however, the new code can serve to set a good example for the rest of the industry and aid in preventing another housing crisis. It can also provide more opportunities for today's appraisers -- all appraisers can equally vie for available jobs and create a higher standard for the industry in the process.
Labels: Accredited Real Estate School, Appraisal License, real estate appraisal, Real Estate Appraisers, Real Estate Market