Expect lots of confusion over the Home Valuation Code of Conduct

Mortgage and Lending with Fairway Independent Mortgage Corporation NMLS #2289 Individual NMLS #74935


 Effective May 1st, 2009 the Home Valuation Code of Conduct will be in place for loan that are sold to Fannie Mae and Freddie Mac.  This new "code" is designed to eliminate influence by loan officers and anyone else who has a vested interest in the value of the home.  What dose this mean?

    One, Appraisals cannot be ordered by the loan officer.  They will most likely be ordered through a clearing house called the appraisal management company.  The lender ordering it would have no say in who is selected as the appraiser.  VA has used a similar system, but the VA acts as the clearing house.

    Two, the Appraisal Management Companies are going to require the appraisal be paid up front before it is ordered.  This means the client will be putting up a credit card number when time comes to order the appraisal.  this is not a new thing for Banks, but the broker community has a mixed record in requiring up front payment for appraisals.

     Three, while the code is supposedly only for Fannie/Freddie loans, some lenders are requing it for all loans to include FHa and RD.  Idaho Housing and Finance and Wells Fargo have indicated it will apply to all loans.  I expect that to be the norm.

     Finally, most lenders are still putting their systems in place here at the 11th hour.  I have numerous webinars, training classes, and email bulletins to get through between now and the end of the month.

It's jsut one of the many changes that have happened and will continue to happen as our industry evolves into something sustainable.  The value of education cannot be understated.

As always, you can call or email me with any questions about the new Home Valuation Code of Conduct.




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Roger Howell

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