I just read an article about some big changes in the Appraisal Industry heading our way (See the Office of Federal Housing and Oversight: www.ofheo.gov). It appears that the government has decided to intervene on nightmare that has become the mortgage industry by digging into Appraisers. Apparently, as of January 1, 2009, we will see a regulation of the small appraisal shops. Fannie Mae and Freddie Mac (and all mortgage brokers for that matter) will have to use independent companies with no ties to the lender. Say good bye to in house appraisals, because lenders won't be able to use them next year. The government wants to keep these far away from the lenders so as to prevent (or to limit) coercion and intimidation from mortgage brokers to the appraisers. Broker-ordered appraisals will also be eliminated, a complaint hot line will be set up, and a code of conduct called the Home Valuation Code of Conduct will be enacted. There will also be a more rigid set of guidelines that Appraisers will need to adhere to. Most of these changes are for the better. The appraiser industry, like the much of the real estate industry, had far too much freedom to value property wherever someone saw fit. I like most of these changes. The one issue I will have will be with the inevitable destruction of the small appraisal shop and a resulting rise in appraisal costs for the consumer. However, I think paying a bit more on an appraisal would be a small price to pay to keep us from getting into another mess like we're in now when the market rebounds again in the future.
God Bless ,
J.P. Benedict, Your Phoenix Area Specialist
www.jpbenedict.com
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