Realtors, lenders and homebuilders say they are united in their desire for "clear, concise regulatory guidance" on the use of distressed properties as comparable sales that will allow appraisers to develop "realistic valuations."
The National Association of Home Builders, the National Association of Realtors, and the Mortgage Bankers Association issued a statement following an "appraisal summit" with federal regulators calling for clarification of rules governing appraisals on loans slated for purchase or guarantee by Fannie Mae and Freddie Mac.
NAR is calling on the federal government "to establish consistent appraisal rules for FHA and the GSEs" (government-sponsored enterprises Fannie Mae and Freddie Mac), the groups said in a press release.
The U.S. Department of Housing and Urban Development on Friday said it will implement new rules for FHA appraisals on Jan. 1 to ensure they are in "full alignment" with the Home Valuation Code of Conduct, rules employed by Fannie Mae and Freddie Mac since May 1.
Some critics say the Home Valuation Code of Conduct has led lenders to rely more on appraisal management companies who have allegedly employed appraisers with little experience in the markets they are asked to provide valuations in.
The new FHA guidelines could help address that issue because they allow separate fees to be paid to appraisers and appraisal management companies, and for those fees to be determined by the market — a detail not addressed in the Home Valuation Code of Conduct (see story).
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