As recently as January 2008, Fannie Mae decided that labeling entire zip codes or counties – even states like California and Florida – as declining markets was a good idea to protect their interest in residential real estate. The blanket designation could not be appealed or overturned by specific underwriters.

As the GSEs like Fannie, Freddie and FHA’s Ginnie steer away from blanket designations, they are going to a 20-point appraisal review system. This will allow underwriters more authority to review each file and grade the property appraisals.

If the appraisal has comparable sales outside of the time or location guidelines, excessive adjustments to value or other problems, the value would be cut or the appraisal rejected.

We are having to fight harder and work more closely with our approved appraisers to keep deals afloat. I am still trying to get my hands on the specific guidelines. When I do, I’ll let you know.

A further complication is the Fannie and Freddie guideline that, as of January 2009, employees involved in loan production will not be allowed to order appraisals or choose an appraiser. Appraisals will be ordered by non-production employees or the end lender AND only from a handful of national appraisal management companies or AMCs (think Old Republic, Land America, etc).

So what does all that mean?

Consumer’s cost for residential financing will be driven higher and higher as AMCs that get government blessing will have a monopoly and charge higher and higher prices. This, in turn, will engender new regulations called price controls. National appraisal companies already charge 40% more than the typical $350 conventional appraisal.

Regulation also has a way of forcing small business out of the market (the ones to best know local markets) as it aggregates power and control higher and higher. That goes for everyone involved in loan origination – appraisers, local brokers and correspondent lenders, title companies, etc.

Since this new regulation does not yet apply to FHA, it also means that more financing will be FHA-insured loans. That can be a good thing for both borrowers and FHA-approved lenders. The downside is that FHA guidelines are fairly cut and dry – unimaginative, if you will. That means the pool of borrowers – such as the self-employed who write-off expenses, fixed income seniors with high DTI ratios, bruised credit borrowers, etc - will become smaller and smaller.

Bottom line: good for major banks, bad for consumers and small business.

It’s also tax day. But April means more than this for Ohioans.

This collection of fabulous spring days has been designated as Financial Literacy Month in Ohio, which makes it a great time to re-focus on getting your finances in order. I don’t mean to encourage the kind of stress that comes from worrying about bills, fighting with your spouse, or trying to figure out how you are going to pay for college years in the future.

There are some great ways to get a clear picture of your financial health. And then take simple and clear steps toward improving the future for yourself and your family, if you have one.

A good place to start this process is at Your Money Now web site established by the Ohio Treasurer’s office. While many people are cynical about government officials actually helping the average citizen, I don’t write about this because Cordray is a ‘Public Official’. After following his career for almost a decade, I see a very smart individual who uses all available resources with a genuine interest in helping others.

With knowledge comes control – and it can be even be fun. This site does have some helpful information about avoiding fraud, tracking your cash flow, teaching your kids the basics, and managing debt. They even have a section in Espanol.

Other fun resources include personal finance blogs like here, here and here. There are even some focused on singles, marrieds, women, news, the heavily-indebted, and goals. Pick the one that meshes with you or put them all into a feed reader.

We recommend getting an annual mortgage review to make sure your loan is still the best for your ever-changing situation. And now is a great time of year to do that. If you’ve had changes recommended by your tax preparer, inherited money, changed jobs, or are even having trouble making your house payment – now is a great time to talk with a loan officer. The worst thing you can do is ignore the problem.

Here’s the Your Money Now website link. YourMoneyNowOnline.org Oh, and enjoy the fantastic spring!