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Working With New Appraisal Requirements
A major shakeup in appraisal rules started with the controversial 2009 Home
Valuation Code of Conduct. The HVCC disrupted the traditional relationships
between appraisers and mortgage originators by eliminating mortgage brokers
from the process.
Beyond the HVCC and affecting all mortgage lending, the Federal Reserve in
October 2010 issued an interim final rule on appraisal independence as required
by the Dodd-Frank Act. Industry expressed concerns regarding the Fed’s
“customary and reasonable” fee provisions. However, efforts to delay or repeal
the Fed’s interim final rule were denied and the rule took effect in April 2011.
Meanwhile, Fannie Mae and Freddie Mac established standardized appraisal data
requirements with an effective date of September 1, 2011. The FHA’s
requirements go into effect at the beginning of 2012.
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Appraisal Independence Requirements
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Have you wondered what the Appraiser Independence Requirements are and how this new code of conduct might
affect your home-buying experience? The Appraiser Independence Requirements (AIR) have come into being as a
replacement of the Home Valuation Code of Conduct (HVCC) as of October 2010. The intent of the new
requirements is to protect investors, homeowners, homebuyers, and the market over all. Experts in the housing
industry, including representatives of FHFA, Fannie Mae, and Freddie Mac, crafted the specifics of this code of
conduct.
What are the AIR (Appraisal Independence Requirements)?
This is a code of conduct applied to home value appraisers. It is a set of regulations put together to provide clear,
fair, and equitable home value appraisals for use for home sales and the origination of loans.
Who is Affected by the Appraiser Independence Requirements?
This code of conduct affects loans that originated after October 2010. It affects the appraisers who conduct
appraisals, and is intended to protect homebuyers and homeowners. Loans originated under Fannie Mae and
Freddie Mac must be appraised by professionals versed in these new rules and standards. The new Appraiser
Independence Requirements do not apply to non-origination appraisals such as tax assessments, broker price
opinions, or automated valuation models.
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