New Appraisal Rules; The Sky Is Not Falling

Mortgage people are fear mongering that the sky is falling, that appraisals will now require up to twenty comps and that we are facing widespread undervaluing that will slow real estate market activity and create chaos in the mortgage industry.

Not so fast.

Right there at the top of the page on the FannieMae website it says; Collateral Underwriter (CU) provides an automated risk assessment of an appraisal report.

That’s it, CU is a tool, an automated tool, and that’s all it is. Right now as I write this, there are already a number of appraisal review tools currently available and actively in use by mortgage lenders. Appraisers endeavoring to make a good faith effort to use appropriate comps (comparable sales), provide accurate and consistent data and make sound adjustments will not see their work challenged by CU any more than it is challenged now by tools currently employed.

CU is and has been part of the mortgage lending landscape for some time. Fannie Mae has been using CU in the quality control process for appraisals on the back end. Lenders are simply moving this quality control tool to the front end of the process.

via New Appraisal Rules; The Sky Is Not Falling.

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