By Erin Grinberg A growing list of questions about the collapse of the housing market includes inquiry on the selection process of appraisers, used in determining the value of a home, during the process of selling. Speculation about appraisers is a result of the exaggerated appraisal values given many homes. In light of recent events, in the housing market, Freddie Mac and Fannie Mae established new criteria to oversee the appraisal process or a ‘home validation code.’ Financial institutions were outraged by several portions of the code, primarily action against mortgage brokers. A large portion of loan origination is initiated by brokers. Under the new code, brokers are no longer able to assign appraisers. Realtors and financial intuitions will be required to follow the code. An appraisal company will be assigned, to avoid the inflated appraisal values some blame for the current status of the housing market. This portion of the code also includes realtors. Freddie Mac and Fannie Mae argue that this move, on behalf of appraisers, takes away the burden of inflating home values. Appraisers, conflicted about the impact of the code, advise implications of the new code take away the positive working relationship between the appraiser, realtor, and financial institution. A list of appraisers will be established for use and assigned to specific brokers and realtors. Appraisers will no longer be required to meet any state level or governmental qualifications. According to brokers and realtors, appraisers not required to meet minimum standards, will complete substandard work. President of the National Association of Realtors, Mark Savvit, fear this portion of the code will decrease business for small brokers, eliminating need for their services in smaller markets. The National Association of Realtors has already threatened to file a lawsuit against Fannie Mae and Freddie Mac. The National Association of Realtors represents over 15,000 brokers across the United States.
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