In the past, when home buyers were financing the purchase of their home through a lender, or refinancing their home, an appraiser was selected by either the loan officer, Realtor or borrower. That choice is no longer available to those utilizing home financing and for a reason.
On December 23, 2008, the FHFA, (Federal Housing Finance Agency which regulates Fannie mae, Freddie Mac and 12 Federal Home Loan Banks), announced the 'Home Valuation Code of Conduct'. This code will help assure that borrowers and secondary mortgage market investors receive a fair and independent property valuation. Additionally, this code will be used to conduct fewer review appraisals and to create broker protection against appraisal misrepresentation. This code will officially be implemented as of May 1, 2009, however conforming and non-conforming lenders have slowly begun implementing this process since December of 2008. You will notice a vast majority beginning to place this into effect next month.
For future, the loan officer will request an appraisal to be performed directly through the lender. The appraiser will now be chosen by the lender out of their list devised of selected certified appraisers. Most lenders are managing this process through their own in-house Appraisal Management Service.
Please know that should your home purchase be a cash transaction, obviously the choice of appraisers is still yours.
Overall I agree with this implemented code of conduct. I'm putting my faith in those appraisers chosen by the lender that they will indeed perform a fair valuation of every home. With this code of conduct implemented, there should be less stress, fewer arguments, and less chance of manipulation of the system. More importantly, this should benefit and provide fair valuation to the prospected borrowers and mortgage market investors. When a future appraisal is preformed, THE VALUE IS THE VALUE AND THAT'S THAT!
For more information, please view the following two links:
Link of the announcement: http://www.fhfa.gov/webfiles/277/HVCC122308.pdf?elqIsAgent=True
Home Valuation Code of Conduct: http://www.ofheo.gov/media/news%20releases/HVCCFinalCODE122308.pdf
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