Fannie Mae has changed home appraisal rules that were troubling homeowners and homebuyers.
The mortgage market giant has instructed lenders to use only appraisers who know the local market and to consider whether short sales and foreclosures are really comparable to non-distressed home sales.
In another change, Fannie Mae said lending officials can’t just decrease a value the appraiser sets for your home. If the lender thinks the appraiser has over-valued your home, it can to either order a review of the appraisal or ask for a completely new appraisal. In some markets, mortgage underwriters were adjusting home values downward themselves rather than using the appraiser’s value.
If an appraiser uses a short sale or foreclosure to value your home, he’ll now have to identify that comparable as a distressed sale and consider any differences between your home and the distressed sale home. Appraisers cannot just assume the properties are equal, the new rules say.
Fannie Mae also made it clear that appraisers are allowed to talk to REALTORS®. Previously, lenders were refusing to allow REALTORS® to talk to appraisers about comparable properties. While it’s still up to the appraiser to decide whether the comparable home sales the real estate agent comes up with are truly comparable to your home, it’s now officially okay for the appraiser to discuss those with the agent.
The changes, sought by the National Association of REALTORS® should result in more accurate appraisals when a home is bought, sold, or refinanced.
By Dona DeZube, HouseLogic News Editor July 14, 2010