Many efforts have been made to try to ensure better and more accurate Appraisals. While improvements have been made in some areas, holes have been created in others. The ups and downs of the Appraisal Accuracy Can Best Be Described As A Roller Coaster Ride.
Several efforts have been made to create a reliable, and transparent appraisal process, but all have failed. It seems when one problem is solved, the solution creates a new problem in another area. In the early to mid 2000's appraisals were very lose, properties appraised for values beyond what they probably should have. From the mid to late 2000's the appraisal process tried to adjust back to more realistic values, but created issues for those who had purchase homes at the height of the market.
In 2009 the "Home Valuation Code of Conduct" (HVCC) was created in an effort to take pressure away from Appraisers by Loan Originators out of the process. While the HVCC took Loan Originators out of the process, it created a you can't touch me attitude from Appraisers, and with the attitude came the under appraisal of properties.
Since the introduction of the HVCC several modifications have been made to the Home Valuation Code of Conduct in an effort to bring a balance back into the appraisal process, and improve the quality and accuracy of appraisals. The latest effort was the creation of the "Uniform Collateral Data Portal" (UCDP), but it two has holes which has led Freddie Mac to request a new appraisal check to be added to the UCDP.
In doing so Freddie Mac has request Clear Capital, an appraisal management company to develop a new appraisal check in the UCDP which will work with Clear Capital's ClearQC software. The hope is that the new appraisal check will bring the UCDP closer to a consistent approach to appraisal reviews, accuracy and quality.
According to an article in the National Mortgage News by Austin Kilgore, the goal is "to evaluate appraisal data received by the UCDP provide; lenders with prefunding feedback about the quality of appraisal data, property valuation and appraiser compliance; and to score and validate appraisals to improve the quality of information backing funding decisions." That sounds like a great goal, but the track record to date to accomplish this has not been very good.
While the issues identified by Freddie Mac are a major concern, there is another concern which needs to be address, and in my opinion easier and less costly to correct. Freddie Mac as well as the other GSE's would better off instituting a process to ensure appraisals are not performed by Appraisers who are not familiar with the area they are performing the appraisal in. This to me is presently a major problem and causing a needless number of inaccurate appraisals. Ensuring appraisals are not performed by appraiser who are not familiar with the area they are performing an appraisal in would go a long way in correcting the reason why the Appraisal Accuracy Can Best Be Described As A Roller Coaster Ride, and finally get the appraisal process back on the right track.
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George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or firstname.lastname@example.org