All I can say is it's about time! The appraisals lately have killed many deals. Hope the new rules from Fannie Mae help and not hurt.
Fannie Mae Tightens Up on Appraisals
Since the new appraisal rules went into effect last year there has been a noticeable decline in the quality of some of the work that has been turned out by appraisers. This has been largely due to the fact that local knowledge of the market has been put on the back burner and, in its place, has been the goal of getting the job done as cheaply as possible.
The net effect has been third party companies hiring appraisers from up to 100 miles away. This, of course, negates any chance of their being familiar with the neighborhood that the property is actually in.
Now it appears as though Fannie Mae has taken notice and has not liked the looks of some of the appraisals on mortgage loans sold to it by lenders. As a result, they have just issued some new, more stringent requirements.
The new language specifies that appraisers must have the "requisite knowledge" along with experience and the correct data to perform an appraisal. This, after much concern has been expressed by industry professionals as to exactly how appraisers are currently being selected. More detail on this via the Chicago Tribune.
Fannie has also said that appraisal reports must now include more photos, including interior shots of the kitchen, main living area, all baths and any examples of physical deterioration and or updating that have taken place in the home.
The tightening up of standards is definitely a step in the right direction. Appraisals should not be compromised in an attempt to get them done cheaply.
We all know that far too much is riding on the accuracy of the residential appraisal.
Copyright 2010 "Fannie Mae Tightens Up on Appraisals"
Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230
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