In order to protect themselves from fraudulent appraisals and inflated values, FNMA and their lenders are instituting a new appraisal ordering process. Many states, including my home State of New York, are requiring a Home Valuation Code of Conduct to be followed by all participants in the Industry. This mean: NO FRAUD!

 

What should have been done years ago, the “round robin” process, begins January 5^th.  The appraisal is now ordered through an approved appraisal management company and assigned to a local appraiser in their roster. No one will know who has the next “up” and will therefore not be able to influence the job. This appraisal will then be certified to the lender of choice. The appraisal management company is paid directly and the appraisal is sent directly to the lender. No mortgage broker, realtor or shady borrower will have influence or touch appraisals ever again.

 

Here are some issues that I already see:

·        The turn time is 5-10 business days

·        Payment must be made prior to the appraisal being done

·        If the appraisal is not ordered through the proper processing channels, a review appraisal will be required costing approximately $265

·        If the client disputes the value of the appraisal, then a dispute form and process must be queued with the appropriate authorities. This dispute will cause delays in the mortgage approval as well as red flag the file

·        If the loan is rejected, getting the appraisal assigned to a new lender will be a bear!

^{·           Â}  The mortgage broker does not get a copy of the appraisal, so how does the borrower get it?

^{·           Â}  The local guy gets paid less, which will force them to either do a greater volume or die out. we will lose the good appraisers because they will not be able to conform

^{·           Â}  There are just a few Appraisal Management companies, so will this create undue influence on a higher level and breed more fraud?

^ 

Yeah, just another good idea!

 

Dale Siegel