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Problem areas: GSEs still finding problems with home appraisals.

Three years after the creation of a database seeking to standardize the home appraisal process, Fannie Mae and Freddie Mac reported Sept. 12 that they continue to see major issues in numerous appraisals submitted by mortgage lenders.

Fannie Mae conducted a sampling of appraisals and determined that 17.6 percent contained contradictory information, typically pertaining to the condition or quality of the property.

The Federal Housing Administration, which oversees the government-sponsored enterprises, estimated that approximately 35 percent of repurchases that require lenders to buy back a loan are tied to faulty appraisals.

In 2010, the GSEs established the Uniform Mortgage Data Program to provide standard requirements for appraisal and loan data. Mortgage lenders have to provide information via an online portal so the GSEs can identify issues and reject them prior to origination.

Fannie and Freddie have been telling lenders about the appraisal problems that need to be fixed, and noted that they have been regularly reporting these issues to state appraisal boards that license and oversee appraisers.

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Title Annotation:UP FRONT Headlines and updates from the appraisal world
Publication:Valuation Magazine
Date:Sep 22, 2013
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