Washington DC home appraisals

HUD, GSEs to Offer New Appraisal Review Option

Finally, an easier way to contest bad appraisals

Home appraisals can now have an official second look if they are inaccurate or bias is suspected in the process.

Starting this August, HUD (U.S. Dept. of Housing & Urban Development), FHA (Federal Housing Administration), and GSEs (government-sponsored enterprises) Fannie Mae & Freddie Mac will allow borrowers to request a re-assessment of the appraised value of their property.

The ‘Reconsideration of Value’ policy offers an aligned approach for FHA-insured mortgages and those purchased or guaranteed by Fannie Mae and Freddie Mac. ‘ROV’ requires lenders to disclose to borrowers that they may request a reconsideration of value, and to provide instructions that explain the process, including what information will be required from a borrower and the expected Reconsideration of Value processing times. The new disclosures must be provided twice–at the time mortgage application is made, and again when the appraisal is shared.

The rule:

  • Requires underwriters to be trained in identifying and remediation of appraisal deficiencies;
  • Includes requirements for lenders when receiving, processing, and communicating the status of ROV requests initiated by a borrower;
  • Sets standards for lender quality control of appraisal reviews and reconsiderations of value;
  • Sets standards for appraisers to respond to requests from lenders for a reconsideration of value review.

This will be a two-part post. Part II will post when forms and guidelines become available.

 

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