Questions about the new appraisal guidelines

We are not appraisers, but the new regulations that went into practice on the first of May have had quite the trickle down effect on our business.
While the way these rules were meant to work should help to slow or prevent the next real estate bubble, it seems that our entire industry is against them.
The bigger problem is that no one (outside of the mortgage business) really understands what the Home Valuation Code of Conduct is all about.Here is what Freddie Mac has on their site

The sale of the following mortgages is exempt from the
Code: FHA/VA, Section 184 Native American, and
Section 502 Guaranteed Rural Housing.
Lender Requirements
The revised Code:
• Prohibits lenders and third parties from influencing
or attempting to influence the development, result,
or review of an appraisal report.
• Requires lenders to ensure that borrowers are
provided a copy of the appraisal report no less than
three business days prior to closing, unless the
borrower waives the requirement. The lender may
require the borrower to reimburse it for the cost of
the appraisal, but the lender must provide a copy of
the appraisal report to the borrower at no additional
cost.
• Requires any third party specifically authorized to
perform certain actions on behalf of the Seller to be
in compliance with the Code.
• Requires lenders or third parties authorized by
lenders to be responsible for selecting, retaining,
and providing for payment of all compensation to
appraisers. The Code does not allow any other
third parties to perform these activities.
• A lender, in connection with the loan being
originated, may accept an appraisal report
prepared by an appraiser for a different lender
provided that the lender obtains written assurances
from the other lender that it has adopted the Code
and determines that such appraisal conforms to
appraisal requirements and is otherwise
acceptable.

Here are some highlights from the FAQ page from Fannie Mae

You can see the full 8 page doc online by clicking here


Q1. What loans are affected by the new Home Valuation Code of Conduct?
Fannie Mae has agreed to adopt the Home Valuation Code of Conduct (“the Code”) for all
conventional, single-family loans originated on or after May 1, 2009, that are delivered to Fannie
Mae. For purposes of the Code, origination date means the date of the application. The Code
will not apply to multifamily loans, or to loans insured or guaranteed by a federal agency; the
Code only applies to 1- to 4-unit single-family loans sold to Fannie Mae. The Code will not apply
to loans sold to Fannie Mae on or after May 1, 2009 that were originated prior to May 1, 2009.

Q2. What are the professional requirements for an appraiser under the Code?
The Code requires that an appraiser must be licensed or certified by the state in which the
property to be appraised is located.

Q9. Does Section I.B.(9) specifically prohibit a lender from ordering a second appraisal?
No. Section I.B.(9) only prohibits a lender from ordering a second appraisal when they are
attempting to influence the outcome of the first appraisal and are now “value-shopping.” As a
risk control measure for certain loan products, it may be common for a lender to order more
than one appraisal, and this subsection does not prohibit that practice.

Q10. Does the Code specifically prohibit communication with an appraiser by a real estate
agent?
No.

Q18. Does the Code apply to other valuation methods (i.e., automated valuation models
[AVMs], broker price opinions [BPOs], tax assessments, etc.)?
No, the Code applies only to appraisals.

Q20. Does the Code apply to a loan that is insured or guaranteed by a federal agency and
ultimately sold to Fannie Mae (i.e., FHA or VA loan)?
The Code does not apply to loans that are insured or guaranteed by a federal agency, such as
FHA and VA loans.