Bay Area REBlog

It seems the mortgage lending mess keeps getting more difficult for buyers. In an effort to fix the inflated appraisals that were a big part of the loose lending procedures, now lenders need to abide by the Home Valuation Code of Conduct.Effective May 1st, these new rules are having the unintended effect of making appraisals more expensive, more time-consuming and in some cases, less accurate. Appraisals can now be done by less experienced or out-of-area workers who are not familiar with pricing trends in particular neighborhoods. Under the new code, if a buyer is getting a Fannie Mae or Freddie Mac backed loan, mortgage brokers can no longer directly request the appraisal. They must go through appraisal management companies thus increasing the cost by $150 or more. Theorically there is an arms-length transaction between the lender and appraiser with the appraiser less likely able to influence the valuation process.

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