Most mortgage loans these days are either insured by the Federal
Housing Administration (FHA) or sold to Fannie Mae or Freddie Mac. This
means that mortgage banks and brokers need to follow the rules set by
Fannie, Freddie, and the FHA. In 2009, Fannie and Freddie adopted new
rules surrounding the home appraisal process known as Home Valuation Code of Conduct or "HVCC". In 2010, the FHA followed
suit and implemented many of the same guidelines. What this means for
you is that the appraisal process is going to be more stringent and
inflexible, costly, and time consuming than it has been in the past.
In fact, many appraisals are now conducted by appraisers who may not live in your community, resulting in value estimates that may not agree with your own opinion of what your home may be worth. Also, many appraisals now go through multiple layers of screening and are handled by Appraisal Management Companies, resulting in higher costs and fees. Not so with imortgage - call me for the details.
Finally, loan originators are prohibited in most cases from ordering appraisals or communicating with appraisers. Even so, it is important to keep in mind that an appraisal is simply somebody's opinion of what your home would sell for in today's market. You and I are entitled to disagree with the appraiser and have a different opinion, but the lending guidelines that we need to follow require us to use the appraiser's opinion when calculating your loan amount and strategy.
your Certified Mortgage Planner, my commitment to you is
that I will help you understand the appraisal report once it is
completed. If there are any errors, I will do what I can to get them
corrected. Most importantly, I will work hand in hand with you to
adjust the mortgage strategy as necessary if the appraiser's opinion of
value comes in below what you or I think your home may be worth.