New Appraisal Law, Is this going to up the economy or exacerbate the already fallen economy?
BUYER SHOULD BEWARE OF NEW APPRAISAL LAW....
At the start of what seems to be a great season for house-hunters, a new law has created difficulties for home buyers, their Realtors and other real estate professionals in an already beleaguered market.
The Home Valuation Code of Conduct, or HVCC, became law May 1. In the details of the law, Fannie Mae and Freddie Mac, quasi-government institutions and purchasers of most mortgages, won't provide funds for mortgage loans unless the appraisal follows a few new guidelines.
One of the main rules prohibits mortgage brokers from ordering appraisals directly from, or having any contact with, a licensed real estate appraiser. This includes approaching them with relevant information. Instead, lenders are required to use third-party "appraisal management" companies that oversee the appraisal and any communication.
One of the largest problems this has created is when a loan officer improperly qualifies the buyer or runs into a new underwriting rule that declines their loan. Previously, the loan could be repackaged and sent to a new source without delay or ordering a new appraisal. Under the new law, appraisals are captive to the lending source, cannot be transferred, therefore a second appraisal fee must be paid by the buyer, or a third, if the loan is especially difficult to place.
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