With just one week remaining before the Housing Valuation Code of Conduct goes into effect, the National Association of Realtors has yet to hear a response from mortgage giants Freddie Mac and Fannie Mae to its request for a one-year delay in the implementation of the code. A spokesperson for the association said it was no longer confident that Freddie and Fannie would take its request into consideration. The letter (see below) was sent to Fannie Mae President and CEO Michael Williams and Freddie Mac interim CEO John Koskinen April 20. Neither Fannie Mae nor Freddie Mac responded to a reporter’s requests for comment.
The new code, slated to take effect May 1, seeks to restore honesty to the appraisal process by eliminating the pressure put on appraisers by mortgage brokers and underwriters to price homes to ensure a loan is approved. The code will do this in part by requiring that more of the hiring of appraisers be outsourced to third-party appraisal management companies.
NAR plans to discuss the next steps it will take in petitioning and lobbying for changes at a May 13 mid-year meeting of its appraisal committee in Washington, the spokesperson said. NAR priorities include a request for publication of material to help lenders, appraisers and brokers understand the changes; as well as the establishment of an agency to enforce the code.
In its letter, NAR makes recommendations about the creation of the Independent Valuation Protection Institute, an organization that would “receive complaints from appraisers and users of appraisal services on the improper influence or attempted improper influence of appraisers.” The institute is mentioned in the final agreement for the Home Valuation Code of Conduct, but specifics for how it will function or be funded are not.