GSEs Still Finding Problems with Home Appraisals

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to place artificially high values on properties, which helped increase home prices.

Murphy’s comments followed similar remarks from an official at the Office of the Comptroller of the Currency, who that same day told conference attendees that banks have been lax in their oversight of appraisers, American Banker reported.

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

Murphy told conference attendees that Fannie will give guidance to lenders next month regarding ways to decrease appraisal conflicts.

“We want accurate data and accurate property values,” Murphy said, American Banker reported.”For years, no one was looking at appraisals. But now we can see things. We want to make sure a property meets adequate appraisal requirements and that the appraisal accurately reflects market value.”

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, according to Murphy.

“Just because a lender uses an appraisal management company, doesn’t relieve them of responsibility as a lender selling to us,” Murphy said, according to American Banker. “At the end of the day, the lender is responsible.”

Murphy added that Fannie has been regularly reporting these issues to state appraisal boards that license and oversee appraisers.

~ Source Appraisal Institute (AI)

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2 Responses

  1. Retired Appraiser Retired Appraiser says:

    Hint: If it’s perfection they are striving for they may want to consider helping appraisers to obtain pay that is at least comparable to minimum wage.

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  2. Baggins Baggins says:

    If the major gse’s want compliance and logical reasoning applied to contradictory points of data which are assembled by the gse’s, the gse’s need to share this data with appraisers. How can I the appraiser respond to contradictory data concerns, when the data I’m supposedly contradicting is kept secret from me? I should be able to punch in an address of a property and see what their records state for UAD ratings and what not. Then and only then can I begin to properly explain my position and explain the merits of similar or dissimilar opinion positioning.

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GSEs Still Finding Problems with Home Appraisals

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