The National Mortgage News is reporting that Freddie Mac is noting a “tangible improvement in the quality of appraisals of loans it buys” since having implemented the Home Valuation Code of Conduct (HVCC). The appraisals are compared against an AVM that Freddie uses as a check. Patricia Clung said that 15 percent more appraisals come acceptably close to the AVM value.
The article goes on to quote Ezzard Alves of Fannie Mae: “Appraisals are low simply because values are declining, which was happening before the code took effect, Alves said. As for the claim that management companies are using “out-of-area” appraisers, he said, Fannie and Freddie require the use of appraisers who know the local market.”
Marko Berishai of DartAppraisal.com cited three factors for the increasing cost of appraisals. Supply and demand is one reason. The cost for appraisers to comply with new requirements is being passed on to consumers. and Third, the 1004MC has added to the cost of the appraisal.