Recently new legistlation went into effect that put additional regulations on home appraisals. These regulations have slowed down appraisals in some cases in this area. An example in point is a recent appraisal for a home sold in Sacramento where the appraisal was done out of a LA office! This appraisal clearly did not know the market for the neighborhoods in this area, and it forced the team to get another appraisal and postpone closing.
The American Banker recently posted this information:
U.S. Reps. Travis Childers (D-Miss.) and Gary Miller (R-Calif.) have teamed up to champion a bill that would put a moratorium on the new Home Mortgage Valuation Code of Conduct.
HVCC is an agreement between Fannie Mae, Freddie Mac, and the New York State Attorney General that went into effect earlier this year with the aim of improving the accuracy of appraisals, although it's come under criticism in the real estate industry for causing its own problems.
Although the agreement involves the New York AG, it's being applied nationwide to all the mortgages handled by Fannie Mae and Freddie Mac.
The bipartisan legislation directs the Federal Housing Finance Agency, which is the conservator of the two secondary mortgage market companies, to suspend the code for 18 months.
Among other things, the code has been criticized by the National Association of Mortgage Brokers for delaying residential property closings and costing its members business at a critical time. Group members also are up in arms about having to pay high fees to appraisal management firms.
[Editor's note: The NATIONAL ASSOCIATION OF REALTORS® has communicated its own concerns over HVCC to the New York State Attorney General and federal lawmakers and policymakers.]
Good news to get this straightened out! Fair appraisals are critical for both the buyer and the seller, but the appraiser MUST know the local market.
Jeff
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