We spoke (complained), and were heard. Fannie Mae told lenders on June 30, 2010, that they “prohibit lenders from changing appraisals” according to a LA Times article yesterday (click here for full story). This is good news for owners of Palos Verdes real estate and buyers also.
Here is what has been happening since the new May 2009 Guidelines. Lenders have been ordering appraisals from Management Companies who sometimes choose an appraiser from out of the area who may have only “minimal access to local realty data” and the appraisal comes in low. Additionally, “Lenders unilaterally may be lowering the numbers on the appraisals submitted to them to avoid accusations that the loans they sell to giant investors Fannie Mae or Freddie Mac are based on inflated appraisals. Such value inflations can expose lenders to ‘buyback’ demands, forcing them to repurchase loans at huge costs,” according to Kenneth R. Harney in his LA Times article.
As of September 1, 2010, the LA Times article goes on to say, “lenders must contact appraisers to resolve any disagreements about the valuation. If that’s not possible, they should order a second appraisal – not just chop the value supporting the real estate contract.” Finally, the voice of reason.
Photo courtesy of Arvin Design
