On June 30, Fannie Mae published several updates to its appraisal-related policies with Announcement SEL-2010-09. To help you understand all the changes, we have included our summary of the announcement below.
If you have any compliance questions or needs, feel free to contact us at 877-250-5243 or info@mortgagecomplianceadvisors.com.
Inclusion of Interior Photos
All appraisals must have photos of kitchen, bathrooms, main living area, and of improvements or deterioration.
Effective: Applications taken on and after September 1, 2010
Lender Changes to the Appraised Value
Lenders can no longer reduce the property value listed on the appraisal report. Lenders can only change the value in the following three ways:
- Contacting the appraiser to address deficiencies contained in the appraisal report,
- Obtaining a desk review or a field review of the original appraisal, or
- Obtaining a new appraisal of the subject property
When a review appraisal or new appraisal is obtained, the lender must use the opinion of market value as stated in the review or new appraisal because the lender has, at that point time, rejected the original appraisal.
Effective: Applications taken on and after September 1, 2010
Appraiser Selection Criteria
Fannie Mae requires that lenders only use appraisers who have the appropriate knowledge and experience. Lenders must use appraisers who have knowledge of specific geographical markets, access to appropriate data sources, and experience in appraising specific property types in those markets. Lenders should review the appraiser’s education and experience, sample appraisals, professional affiliations, and references from clients and employers. Fannie Mae also clarifies the use of AMC’s:
- Neither the Home Valuation Code of Conduct (HVCC) nor Fannie Mae requires the use of a third-party vendor;
- Lenders are ultimately responsible for representations and warranties related to the value, condition, and marketability of the subject property; and
- Lenders must hold the AMC responsible for complying with Fannie Mae’s requirements.
Effective: Immediately
Selection and Use of Comparable Sales
The appraiser must list both data sources and verification with respect to comparable sales selected by the appraiser.
Effective: Immediately
Miscellaneous Appraisal –Related Guidance
Communication under the HVCC
Fannie Mae has determined that appropriate communication under HVCC is permitted, and HVCC does not prohibit any employee of the lender (except for anyone in loan production) from requesting that an appraiser provide additional information or explanation about the basis for valuation or from correction objective factual errors in an appraisal report.
Seller Concessions
Fannie Mae reminds lenders not to allow excessive sales concessions.
Treatment of Personal Property
Fannie Mae reminds lenders that personal property cannot be included in any mortgage.
Market conditions addendum to the appraisal report (Form 1004MC)
In Form 1004MC, in order to provide the most accurate depiction of the “Months of Housing Supply” as of the effective date of the appraisal, the “Total # of Comparable Active Listings” should be based on a specific point in time.
Effective: Immediately. Except for form 1004MC: effective date is application taken on and after September 1.
To view the actual Fannie Mae Announcement SEL-2010-09, click the link below:
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/sel1009.pdf
*Join our free webinar on July 22 about Fannie Mae’s LQI: “Understanding How The LQI Affects You.”
Tags: fannie mae announcement sel-2010-09, fannie mae appraisal, fannie mae appraisal policies, fannie mae summary, fnma appraisal, new fnma appraisal rules
