Fannie Mae and Freddie Mac, the biggest sources of financing for U.S. home loans, agreed to overhaul the way property appraisals are conducted in a deal reached today with New York Attorney General Andrew Cuomo.
The government-chartered companies will adopt new standards to ensure independent, reliable appraisals, Cuomo said in a news release. Mortgage brokers will be prohibited from selecting appraisers and lenders won’t be able to use their own in-house appraisers for initial valuations. The agreement also bans lenders from using appraisal management firms they own or control.
As best we can tell the agreement becomes fully effective on January 1, 2009. And once again, we have to wonder if non-conforming players will follow suit.
∙ “Instant Equity” Hawkers Take Note (Along With Everybody Else) [SocketSite]
∙ Fannie Mae, Freddie Mac to Overhaul Appraisals in Cuomo Deal [Bloomberg]