National Mortgage News reports that the new Federal Housing Administration (FHA) appraisal rules may make HVCC – and appraisal management companies (AMC) – easier to cope with in the industry. While noting that the intent of HVCC was to improve appraiser independence and reduce undue influence, the article notes that in trying to accomplish these goals HVCC has increased the cost of the appraisal and raised questions about appraisal quality.
The new FHA rules will help because appraisers can report their fee on the appraisal report, which will “hold AMCs feet to the fire. FHA’s new policy allows the appraiser’s fee and the management company’s fee to float separately at market rates.” Donald Blanchard, chief compliance officer for Lender Processing Services, is ok with this new rule but expressed concerns that this will ultimately result in higher prices for an appraisal.
NAR supports the new FHA appraisal rules because of the fee disclosure, the transfer rules now in place, and because FHA explicitly states that AMCs do not have to be used by lenders. The Realtors are calling on FHA and the GSEs to issue joint guidance in the form of codified frequently asked questions.