Fannie Mae and Freddie Mac, along with the Office of Federal Housing Enterprise Oversight (OFHEO), have agreed to form an independent organization to launch and monitor a new set of loan appraisal standards in an effort to reduce the risk of fraud, among other issues.
The "New Home Valuation Protection Code" establishes new requirements governing appraisal selection, solicitation, compensation, conflicts of interest, and corporate independence, among other reforms. These requirements include prohibiting mortgage brokers from selecting their own appraisers, and prohibiting lenders from using "in-house" appraisers and using appraisal management companies they either own or control.
The agreement also calls for the creation of the "Independent Valuation Protection Institute," which would serve to implement and monitor the "New Home Valuation Code." The Institute will be funded by Fannie Mae and Freddie Mac and operate as a consumer contact center for complaints from both borrowers and appraisers alike.
To read comments about the new agreement by Freddie Mac Executive Vice President Robert E. Bostrom, go directly to http://www.freddiemac.com/news.
**Taken from the California Association of Realtors Bulletin, dated March 5, 2008.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment