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Fannie Mae, Freddie Mac: Appraisal Rules About to Get Stricter
Fannie Mae and Freddie Mac, the two largest buyers of mortgages on the secondary market, will be toughening up their home appraisal standards as of January 1, 2009.
What did appraisal standards have to do with the mortgage crisis? Up until now, the relationship between a loan officer or broker and a home appraiser has been pretty snug. In many cases, loan officers would pick individuals who would create inflated appraisal reports, making it easier for a consumer to qualify for a bigger loan.
Under the new rules, employees involved in issuing mortgage loans can no longer be involved in the appraisal process, and an independent organization will be set up to monitor appraisal practices.
New York Attorney General Andrew Cuomo, who had been investigating inflated mortgage appraisals, will now close the file.
September 16th, 2008 at 1:01 pm
Can you smell the irony? Just after these two companies start caring about standards the floor falls out from the mortgage industry. Too little too late, and now we see the financial projections were off by just a few billion dollars.