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Living with the code

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The Home Valuation Code of Conduct -- a new set of rules governing appraisals conducted on loans slated for purchase by Fannie Mae and Freddie Mac that took effect on May 1 -- has been a contentious issue for real estate professionals.Some industry groups say the new rules, intended to protect appraisers from coercion by lenders, have derailed sales in part because lenders are shifting work to appraisal management companies that may employ appraisers with little experience in the markets they are assigned to work in. Too often, critics say, appraisers are relying on distressed properties -- homes threatened by foreclosure or repossessed by lenders -- as "comparable sales" to value non-distressed or newly-built homes, without making appropriate adjustments to reflect differences such as a property's condition or geographic location. Property values can vary greatly from neighborhood to neighborhood, critics say, and inexperienced appraisers are often unaware of such boundaries...