Changes to the home appraisal process haven been long awaited and are finally here. As of May 1, 2009 the following points have been implemented to protect homebuyers, mortgage investors, and the housing market.
1) The code prohibits lenders and third parties from influencing the development, result, or review of an appraisal report.
2) It also requires lenders to provide homebuyers with a copy of the appraisal report no more then three days before closing, which in my opinion should be standard practice anyway. After all the homebuyer is paying anywhere from $350 and up for the report. Some lenders may require the purchaser to reimburse the cost of the appraisal but supply the report at no additional cost.
3) Any third party authorized to perform specific actions on the sellers behalf must comply with the Code as well.
4) Requires lenders or third parties authorized by lenders to be responsible for selecting, retaining, and providing for payment of compensation to all appraisers. No other third parties are allowed to perform these actions.
5) A lender that has originated a loan can accept an appraisal report from an appraiser originated by another lender as long as there are written assurances that that appraiser adopted the code and determines that the appraisal conforms to appraisal requirements.
This code must be followed for any mortgages that are purchased by Freddie Mac and Fannie Mae, the two largest purchasers of mortgages in the secondary market.