Now that the controversial (to put it mildly) Home Valuation Code of Conduct (HVCC) has been put to rest as part of The Dodd-Frank Wall Street Reform, Fannie Mae has released their “Appraiser Independence Requirements“. Fannie Mae says the purpose of these requirements is to:
- Protect the independence of appraisers and the integrity of their appraisals.
- Extend these important protections for home buyers, mortgage investors, and the housing market.
- Reinforce Fannie Mae’s commitment to responsible lending and mortgage quality standards.
The new requirements include:
- No employee, director, officer, or agent of the Lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner.
- Lender cannot obtain a second appraisal in connection with a Mortgage financing transaction just because they are not satisfied with the value reached in the initial appraisal.
- Buyer is required to be provided a copy of the appraisal.
- There must be separation of a mortgage company’s mortgage production functions and appraisal functions. An employee of the company in the sales or Mortgage production function shall have no involvement in the operations of the appraisal function.