Appraisal Institute joins 35 groups seeking to halt appraisal waivers.
The Appraisal Institute on Sept. 6 joined with nearly three dozen appraiser organizations in asking Congress to call on the Federal Housing Finance Agency to prevent Freddie Mac and Fannie Mae from issuing appraisal waivers.
The government-sponsored enterprises announced plans to no longer require appraisals for first-purchase loans, as well as for mortgage refinancing. The Appraisal Institute is among 35 groups seeking to prevent the FHFA from implementing the appraisal waiver program until the GSEs can demonstrate that the program:
* Is consistent with safe and sound operation of Freddie Mac and Fannie Mae.
* Does not bring harm to the consumer, especially in the affordable housing sector.
* Is properly monitored by the FHFA and tested with independent appraisals.
* Integrates proper safeguards to prevent fraud.
In a letter to the chairs and ranking members of the Senate Banking, Housing and Urban Affairs Committee and the House Financial Services Committee, AI wrote, "It has taken many years for the mortgage finance sector to recover from the financial disaster in 2008-09, but progress has been made. The significant progress is due in large part to the employment of fundamental risk-management activities, such as the requirement for the completion of full appraisals to determine the true equity position of individual properties. Reducing appraisal requirements sends the wrong signal to mortgage loan sellers about the importance of fundamental risk-management practices and the need to continue to employ strong underwriting guidelines to avoid the costly mistakes of the recent past."
The Appraisal Institute offered some suggestions to Congress and to the FHFA: "At a minimum, the Agency should request the estimates of the number of loan purchase and refinance transactions that would be subject to the new programs and make those estimates public for comment by affected stakeholders and other experts.
"Further, as your Committee develops housing finance reform legislation, we ask that any legislation ensures that the Enterprises' appraisal requirements enhance their safe and sound operation so long as the Enterprises remain in or otherwise present potential risks to taxpayers and homeowners."
* Read the letter at http://bit.ly/2BxzHJy.
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|Title Annotation:||Up Front: APPRAISAL INSTITUTE AND INDUSTRY NEWS|
|Date:||Sep 22, 2017|
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