Appraisers Face Changing Rules
During the Great Boom years of real estate, appraisers helped values show huge price appreciation, even in a short period of time, which only fueled the fire of buy-sell-roll over mania. Now appraisers too will be operating under new rules.
According to an article by Christopher Palmer, of McGraw-Hill, "starting May 1, lenders that want to sell their loans to Fannie Mae or Freddie Mac must follow new guidelines. Mortgage brokers and realtors will no longer able to choose appraisers. They will be selected by lenders, who are not allowed to influence appraisers by withholding payments or promising future work. If lenders have in-house appraisers, the bank’s loan-origination department is not allowed to influence their valuation decisions or supervise their work."
Many of us, as realtors, of course have worked within these guidelines for years, hoping the appraisal would be an independent valuation. But apparently, some appraisers were unduly influenced, and this new rule will crack down on pressure applied by unscrupulous lenders or realtors to inflate an appraisal. Palmer explained, "Lenders who operate independently of those channels do not have to follow them (the new rules). But since Fannie and Freddie buy or guarantee a huge share of all U.S. mortgages, the changes should have wide application.
"A lot of appraisers aren’t happy about the looming changes. In a poll conducted on Jan. 16 by the American Appraisal Institute trade group, 60 percent of appraisers said the code was unlikely to change the quality of appraisals. The 600 or so survey participants also said the biggest problem in the industry wasn’t pressure from clients, but poorly trained appraisers."
The best solution for you as a buyer or seller is to deal with a Realtor whom you trust - period.
Sherry Armstrong, Realtor
sherry@sherryarmstrong.com
www.sherryarmstrong.com
386-679-3191