The new rules Summarized:
- Anyone associated with producing a mortgage cannot select the appraiser judging the property
- To comply with the new regulations, which cover all Fannie Mae- and Freddie Mac-backed loans, lenders have turned to “appraisal management” companies, which typically select appraisers from a pool.
How these changes affect YOU:
- The National Association of Mortgage Brokers estimates that the new code has added an average of $711 to the cost of getting a mortgage because of added fees for second appraisals and extended loan locks.
- Appraisers will now determine values for homes in areas in which they are unfamiliar i.e. an appraiser may work in one county but may be asked to go to another county to determine the value of a home.
- Under the new system, appraisal requests now go through the management companies, which retain as much as 40 percent of the appraisal fee. The appraisers that take these assignments via the appraisal management companies, accept nominal fees and may not take the time to adequately research a market
The National Association of Realtors has asked ranking members of Congress, and the conservator overseeing the government-supported mortgage backers Fannie Mae and Freddie Mac, for an 18-month moratorium on the new system.