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Monday, March 03, 2008

OFHEO, NY AG, Fannie, Freddie Agree to Combat Appraisal Fraud

by Calculated Risk on 3/03/2008 11:38:00 AM

From OFHEO: OFHEO, NY Attorney General, Fannie Mae and Freddie Mac Sign Agreements to Combat Appraisal Fraud

There are many significant provisions in the agreements that are designed to strengthen the independence of appraisers, including eliminating broker-ordered appraisals, prohibiting appraiser coercion, and reducing the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages. The agreements also enhance quality control in the appraisal process and establish a complaint hotline for consumers. The agreements include a Home Valuation Code of Conduct that the Enterprises will apply to lenders selling mortgages to Fannie Mae or Freddie Mac. The Code becomes effective on January 1, 2009.

The parties also agreed to establish and the Enterprises fund an Independent Valuation Protection Institute designed to supplement current efforts to provide an appraisal complaint process, mediation of appraisal disputes, and mortgage fraud reporting.
Tanta had some commentary last week: Fannie Mae New Rules for Appraisals