Changes Needed to Home Valuation Code

CUNA News Now
May 1, 2008 | COMMENTS

The Credit Union National Association (CUNA) is seeking changes to a proposal by Fannie Mae and Freddie Mac to implement the New Home Valuation Protection Code (Code), new standards designed to ensure independent and reliable appraisals.

In March, the Office of Federal Housing Enterprise Oversight (OFHEO), the New York Attorney General, Fannie Mae, and Freddie Mac entered into agreements that require Fannie and Freddie to buy loans only from financial institutions that meet the new standards set out by the code.

However, in an April 30 comment letter, CUNA opposed a requirement that financial institutions establish and maintain a telephone hotline and email address to receive complaints regarding possible improper influencing of the appraisal process.

CUNA wrote that this provision is duplicative of similar requirements that will be imposed on the Independent Valuation Protection Institute (Institute), an entity that would be funded by both Freddie Mac and Fannie Mae.

CUNA also recommended that Freddie and Fannie should delay the effective date of the Code so that it applies to loans originated after January 1, 2010.

The implementation issues surrounding the new CODE, CUNA said, as well as other provisions, such as a requirement to perform quality tests of a randomly selected percentage of appraisals, will require new procedures and additional staff training which will take time to address.

Use the following link to read the complete CUNA comment letter:

> Freddie and Fannie Comment Letter

This article originally appeared in CUNA News Now and is reprinted with permission.