Industry NewsMortgage

Bill would suspend new appraisal rules

NAR seeks 18-month reprieve on valuation code

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Legislation that would grant a plea by the National Association of Realtors to suspend for 18 months new rules governing appraisals conducted on loans purchased by Fannie Mae and Freddie Mac has been introduced in the House of Representatives.Rep. Travis Childers, D-Miss., is sponsoring the bill, HR 3044, and Rep. Gary Miller, D-Calif., is the lone co-sponsor to date. The bill, which would impose an 18-month moratorium on the Home Valuation Code of Conduct, was introduced June 25 and referred to the House Committee on Financial Services.Critics say that after the code went into effect on May 1, lenders began relying more on appraisal management firms employing appraisers who lacked experience in their local markets. Some appraisers are also relying too heavily on distressed properties when identifying comparable sales in valuing nondistressed properties, critics say.NAR and the National Association of Home Builders believe that low appraisals derailed many sales in May. A trade associa...