Realtors® Applaud Appraisal Clarification as Good First Step

WASHINGTON (July 23, 2009) – The following is a statement by National Association of Realtors® President Charles McMillan:

“NAR and our 1.2 million members are pleased that the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to take action to clarify confusion over the new Home Valuation Code of Conduct for home appraisers implemented this past May.

“Our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area. The ramifications were so great to our members and to the housing industry that I personally met with the New York Attorney General’s office and with the head of the FHFA to share our concerns.

“In those meetings I shared an NAR survey that found 76 percent of our members, representing both buyers and sellers, had experienced an increase in appraisal time since the new HVCC rules were enacted. Similarly, 71 percent of Realtors® noted an increase in the use of appraisers who were not from the local area. These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates. I expressed our serious concern in the meetings.

“We took this information, and our concerns, to those organizations responsible for the changes and we are pleased that they listened. Today Fannie Mae and Freddie Mac issued clear guidance on two very important points that we raised in our meetings. First, the guidance states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talking to real estate agents.

“NAR has asked Congress and the FHFA to immediately implement an 18-month moratorium on the new HVCC rules to further address unintended consequences of this new rule. We will continue to push for this, but are pleased that this first step was taken today.”

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