VaCAP Sits Down with Fannie Mae
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As many of you know Fannie Mae (along with Freddie Mac) has launched an initiative which they label “modernizing appraisals”. This initiative consists of two distinct facets: 1) “modernizing”, or redesigning the forms which are utilized and 2) “modernizing” the processes involved in producing a valuation including the inspection process, data collection, etc., up to the delivery of the completed report. In the pursuit of this goal Fannie Mae has pledged to leverage stakeholder input, and of course appraiser input is both valuable and critical in this regard. In gathering stakeholder input Fannie Mae reached out to VaCAP, and invited three of its leaders to Washington DC for a sit-down discussion of relevant topics. VaCAP wishes to thank the agency for this opportunity, and applauds them for seeking dialogue with appraisers, most particularly in terms of a state appraiser coalition.
The meeting took place on June 6th and included three Credit Risk Analysts from Fannie Mae’s Collateral Policy and Strategy Team. These three representatives are at the tip of the spear for the modernization effort. In advance of the meeting each side prepared items for discussion and submitted them to the other party. Obviously no proprietary information was discussed. Further VaCAP learned upon arrival that this team is not directly involved with the forms redesign facet of the initiative, thus Fannie Mae’s modernization efforts relating to the appraisal process facet of the initiative were the sole focus of the discussion. Fannie Mae had a number of issues/topics for discussion and VaCAP provided commentary and opinions on these issues. VaCAP asserted to the representatives that a large number of the goals which they seek to achieve/problems that they seek to resolve originate with, or are stifled by the involvement of AMC’s in the process. While this is extremely alarming for the appraisal community Fannie Mae themselves cannot initiate any maneuvers which would eliminate that paradigm. Thus VaCAP feels their modernization initiative is, by definition, limited.
VaCAP presented questions and issues of their own for discussion. As might be expected quite a bit of the dialogue centered on Property Inspection Waivers, Alternative & Hybrid Appraisal Models, and the original comparable photo issue and the nature of that function as adverse to the desired streamlining of the process & reducing turnaround times. Of note is that VaCAP was encouraged to learn that Property Inspection Waiver execution had actually declined (although fractionally), and that expansion of the program would require more than simply a decision by Fannie Mae to do so, but rather would require maneuverings involving Fannie Mae’s regulator (the FHFA) and expanding the credit box consumers. VaCAP also presented several general questions offering commentary & opinions on them, with a central point being that we believe a practice of maximum transparency by the agency best serves all stakeholders and fosters the public trust
The meeting lasted roughly two hours. There was no shortage of commentary from either side on the issues. The discussion was lively and, as would be expected, questions (and responses) were generally direct. In several instances both sides agreed on helpful or even best approaches to achieving the goals sought in the modernization effort. In other instances VaCAP and the agency simply had to agree to disagree. The meeting adjourned at roughly 5 p.m. Despite the fact that ultimately no individual or organization could have provided their team representatives with stunning revelations or issue positions which they had not likely heard from other stakeholders, and the inevitable disagreements on some issues, VaCAP was very pleased to have the opportunity to open this dialogue with Fannie Mae, a fact that we deem to be critically important going forward as we navigate the undeniably changing landscape in the appraisal space. In closing we expressed with their team members our hope that this would be the initial step in a continuing dialogue in the future.
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