November 24th, 2008 5:22 PM by BILL WILBANKS
Conventional Conforming and Nonconforming Appraisal Process due to change after the first of the new year industry wide. A new day.
Beginning May 1, 2009 new appraisal order requirements are due to take effect. In another government attempt to restore confidence, maintain loan integrity, ensure fair and responsible lending and help sustain the mortgage lending business for the long term, changes in the way in which appraisal orders will be made and by whom will be rolled out after the start of the new year. The goal said to be to take the assumed sales force influence out of the picture on the appraisal process, all thanks to Mr. Cuomo from New York more or less for basically cornering Fannie and Freddie into it at the height of the sub-prime crisis last year. Now we apparently will all live with the decision and it's yet to be proven impact on the housing market and mortgage process generally.
The new Home Value Protection Code will require the sales force for lenders, brokers or anyone involved in the transaction to be kept out of direct contact with the real property appraiser in an attempt to neutralize any effect they may have on the property evaluation process. Some lenders are beginning to set the process gears in motion now. It appears that separate Appraisal Management Companies (AMC) will be used to place initial orders through and they in turn will order the appraisal directly through their preapproved appraiser list of local appraisers on a rotation basis, who have agreed to meet lender underwriting guidelines.
You will be required to prepay the order using your credit card up front prior to the service being completed. Sales prices (not value estimates) will be provided to the appraisers office by the AMC on a purchase, but no estimate of value will be given on a refinance order, relying totally on the appraiser to determine value independently. So, be as realistic as you can on your estimate. Service times are said to be expected to be 5 to 7 working days from date of payment. This will apply to all conventional lenders at this time.
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