Industry NewsMortgage

New rules for Fannie, Freddie appraisals

Vendor says many lenders not ready for Friday's deadline

Many lenders aren't prepared to comply with new rules going into effect Friday governing appraisals on loans to be purchased by Fannie Mae and Freddie Mac, according to a company that offers software for managing the appraisal process. Lansdale, Pa.-based Global DMS LLC says many lenders assume that if they are using an appraisal management company, they will be in compliance with the Home Valuation Code of Conduct Fannie and Freddie are implementing May 1. That's not true, says Global DMS President Vladimir Bien-Aime, nor is it the case that lenders must use appraisal management companies rather than independent appraisers. But Bien-Aime warns that some lenders aren't aware they can no longer pay for appraisals "COD," or collect on delivery, meaning they will have to manage prepayments in addition to managing the appraisal process. Global DMS says the company's OASIS Software allows lenders to order, locate, and manage appraisals using their own appraisers or Glob...