The Federal Housing Finance Agency issued a notice seeking to address “misinformation” regarding the Home Valuation Code of Conduct. The notice, titled “Strengthening Appraiser Independence and Improving the Valuation Process,” was issued July 22, 2009. According to the Notice, the Code, adopted in December 2008, “expanded on existing [Fannie Mae and Freddie Mac] appraisal standards, seeking to redress problems that contributed to the current mortgage crisis and to improve the quality of the mortgage loans they purchase. . . . The HVCC is designed to promote professional appraisals free from inappropriate pressure from lenders, borrowers or brokers.”
To address the “misinformation”, the Notice provides, among other things,:
“Contrary to some suggestions, the Code provides for communications with appraisers about errors, additional needed information and unprofessional conduct. . . . The real bar is on communications that seek to influence the appraiser to adopt a set valuation, which is prohibited.”
“Contrary to some suggestions, the Code does not lead to lower appraisals for property. The Code insulates appraisers from pressures that led to higher or lower appraisals and should now lead to more accurate valuations.”
“Contrary to some suggestion, the Code does not favor the use of [Appraisal Management Companies] over independent or in-house appraisers.
“The use of unqualified in-state or out-of-state appraisers, unfamiliar with local conditions, should be reported to state appraiser licensing agencies.”
“Contrary to some suggestions, appraisals are transferable between lenders under the Code.”