Fannie Mae and Freddie Mac implemented a new appraisal rule starting May first, written by the office of New York Attorney General Andrew Cuomo last year; however, critics of the new rule applied pressure before the July 4 congressional recess with the introduction of bipartisan legislation that would mandate an 18-month moratorium on the “Home Valuation Code of Conduct.”
Kenneth R. Harney wrote an article for RealtyTimes.com which read: “In a statement to Realty Times, Congressman Gary G. Miller said that although he is “supportive of the intent” of the code, he has increasingly heard from Realtors and mortgage brokers in his district near Los Angeles who complain that “the cost of appraisals has increased and their quality has dropped.”
He goes on to say “Though the rules seek to ensure independent, unbiased property valuations, they also radically changed the traditional system: They prohibit mortgage brokers from ordering or discussing valuation assignments with appraisers, and send most of the business to appraisal management companies – some of them subsidiaries of major banks.
The management companies, in turn, offer appraisers low fees – 50 percent less than previously standard fees in some cases – and have raised total charges to consumers. Many appraisers with extensive experience have refused to accept the low payments, leaving the business increasingly in the hands of appraisers with little experience who are willing to work for less money.
Some management companies reportedly have ordered appraisers to conduct valuations on properties far beyond their local areas – leading to lowball valuations that delay or kill home sales, according to realty agents and mortgage brokers.”
To learn more about the possible moratorium, please contact our office.
To view the full article, visit http://realtytimes.com/rtpages/20090706_washingtonreport.htm
Posted by Karen Gagliardi, Berlin Law Firm, Business Development Coordinator