Changes in how homes are being appraised coming in 2015
Thanks to the government, Fannie Mae will be making changes once again to the already inundated real estate appraiser. A new program that has launched this year from Fannie Mae has lead to slower home sale closings says a local Realtor. The new collateral underwriter program is busting deals because the values from their GSE software is contradicting what the real estate appraisers are valuing properties at.
Recently, Fannie Mae has offered mortgage lenders access to their proprietary home valuation databases to assess the accuracy of and risks posed by reports submitted by appraisers. This software is not always accurate and as a result is causing delays and backups.
While Fannie Mae means well, this will only create higher costs for consumers and more red tape. The software is designed to flag potential errors in the appraiser’s evaluation of a property before the lender commits to fund the loan. This software can provide as many as 20 alternative comparable sales for the appraiser to look at. Can you imagine how much extra work the appraiser’s are going to have? With raising gas prices, lower pay for appraisers because of AMC’s and rising insurance costs, it’s no wonder so many appraiser’s are leaving the business.
Unfortunately, government has once again lost touch with the people. The bottom line, this will lead to many delayed closings and higher costs as well as a depression of prices in markets that are healthy and on the rise. Hopefully, they’ll figure it out before making too much of a mess.