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Freddie Mac Releases New Guidance for Appraisals

On July 10, Freddie Mac released Bulletin 2009-18 to sellers and servicers. The bulletin addresses appraisals and underwriting. Regarding appraisals, the bulletin focuses on qualified appraisers, credible appraisers, comparable sales, and monitory appraisal quality. Freddie Mac reminds sellers that they must be in compliance with the Home Valuation Code of Conduct (HVCC).

Here are the highlights from the bulletin:

-Appraisers are reminded that they must be familiar with the local market in which the property is located and must be competent to appraise the subject property.

-Appraisers must be provided with a copy of the sales contract.

-Freddie Mac does NOT have requirements about comparable sales. The bulletin states “Freddie Mac does not require appraisers to use REO or short sales.” However, the appraiser may find these properties are representative of the properties available to typical purchasers so appraisers may consider their use.

-Sellers are encouraged to consider membership in a professional appraisal organization as a qualification criterion, but membership or lack of membership should not be the only criterion for selecting appraisers.

-Sellers should ensure appraisers have reasonable time to perform appraisals.


http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0918.pdf

Comments
  1. Tim

    Tell that to one of the Big Five Banks Underwriting Dept. I’m sure that will change their mind on valuation conditions.

  2. David

    Unfortunately appraisers have been FORCED to accept jobs in distant locations in order to stay in business. Need I remind you that 2 1/2 months ago they were forced to give up the majority of their client base and asked to sit by the phone and wait for it to ring.
    Stupidity On The Part Of The Government…yet they complain about it’s results on a daily basis.

  3. Judy RAy

    This government continues to regulate this industry without knowing what is realy happening in our local markets. By allowing appraisers to use REO and Distressed properties they are artificially decreasing the real value of homes. A home owner who may need to re-finance or or a buyer buying a home that is not a REO or Short Sales can not get a fair appraisal in todays market. The powers that be should remind our government that there are three methods of appraisals. Comparable Properties, Income approach and Cost Method. Our apprasers should be using a combination of Comparables and Cost to be correct and fair to home owners, builders and the market in general. We all know that the prices on REO and Short Sale properties is not the true value of a house and these destressed properties should not be the sole source for appraisals.

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