""Fannie Mae"":http://www.fanniemae.com says it is working with its regulator, the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) to develop and adopt new appraiser independence requirements that will[IMAGE]
replace the controversial Home Valuation Code of Conduct (HVCC) that was enacted by the GSEs in May of last year.
Until the revised requirements are released, the existing HVCC provisions in the ""Fannie Mae Selling Guide"":https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf are still in effect.
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, HVCC will sunset when interim final regulations are released to implement the appraisal independence-related provisions of the legislation. Fannie says it expects the new appraisal rules to be issued by October 21, 2010.[COLUMN_BREAK]
Both Fannie Mae and sibling mortgage financier ""Freddie Mac"":http://www.freddiemac.com require that all single-family loans they purchase adhere to the HVCC, which establishes standards for solicitation, selection, compensation, and practitioner independence when it comes to home appraisals. The code was developed to ensure appraisers' work is conducted autonomously, without pressure from lenders and real estate agents to manipulate property valuations.
The GSEs say HVCC has eliminated undue influence and conflicts of interest on appraisals, while Realtors and home builders argue the new rule has led to lowball property valuations, botched sales, and higher appraisal fees.
Fannie Mae says the new appraisal requirements in development are expected to be ""substantially similar to the current provisions"" in the HVCC.
The GSE said in a notice issued Friday, ""Fannie Mae is committed to supporting strong appraiser independence requirements. The revised requirements will maintain the spirit and intent of HVCC, and continue to provide important protections for mortgage investors, homebuyers, and the housing market.""
According to Fannie, the revised appraiser independence requirements will be based on the company's experience under the HVCC and ""will continue to support the integrity of the appraisal process.""
Fannie Mae says it has received input from key industry participants as part of the process to develop the new set of appraisal rules.