twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories free on your Web site or for your RSS reader.

News Archives
Archive of stories by month going back to 1999.

Press Releases
Reports and announcements from

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map
Appraisal News | AMC Directory
Appraisal industry news coverage, including stories about independence requirements, AVMs and appraiser fraud.

Conforming Appraisal Overhaul

Fannie, Freddie agree to new code with NY AG

March 3, 2008

By staff

In an effort to curb the use of inflated appraisals, sweeping changes have been made to residential appraisal requirements on conforming mortgages. Among the changes is the prohibition of appraisals ordered by mortgage brokers and loan originators.

Fannie Mae and Freddie Mac have entered into cooperation agreements with New York Attorney General Andrew M. Cuomo to only purchase loans that meet a new home valuation protection code, Cuomo announced today. The code is effected on Jan. 1, 2009.

Under the new code, mortgage brokers and loan originators are prohibited from choosing or communicating with appraisers. In addition, lenders cannot use in-house staff appraisers to conduct initial appraisals, are prohibited using appraisal management companies that they own or control and cannot allow originators to work in the same unit as anyone who chooses appraisers.

"If absolute lines of independence cannot be achieved as a result of the originator's small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process," the code stated.

On loans originated on or after Jan. 1, 2009, lenders will be required to represent and warrant that appraisals on loans they sell to the government sponsored enterprises adhere to the code, Cuomo said.

Other provisions include a prohibition of coercion or extortion by withholding or threatening to withhold payments for appraisals or threatening to stop giving business to an appraiser. In addition, lenders are prohibited from promising or implying future business will be given to an appraiser based on value, requesting that the appraisal only be done if a particular value can be met, and providing a target value to the appraiser.

The code also prohibits ordering a second appraisal when the first one comes in too low.

"The agreements should help restore confidence in the mortgage market by enhancing underwriting practices, reducing mortgage fraud and making home valuations more reliable," James B. Lockhart, Director of the Office of Federal Housing Enterprise Oversight, said in a statement. OFHEO regulates Fannie and Freddie.

Lenders will be required to provide borrowers with a copy of the appraisal at least three days prior to closing, unless the borrower explicitly waives this requirement.

Fannie and Freddie have contributed $24 million to the Independent Valuation Protection Institute, an organization created to implement and monitor the code. The institute will issue a public report twice yearly and establish a telephone hotline for borrowers to call if they suspect appraisal fraud or a tainted appraisal process.

In addition, appraisers who feel their independence has been compromised can contact the institute, which will mediate complaints or forward them to state or federal law enforcement agencies or regulators.

"Again and again our industry-wide investigation found that banks were putting pressure on appraisers to drive up the value of loans just to make a quick buck," Cuomo stated in the announcement. "Now national banks have a clear choice: immediately adopt the new code and clean up appraisal fraud in the mortgage industry or stop doing business with Fannie Mae and Freddie Mac."

The agreement is the result of an investigation Cuomo has been conducting on appraisal fraud for more than a year. It follows a lawsuit filed in the Supreme Court of New York, New York County, against First American and its subsidiary eAppraiseIt alleging a conspiracy with Washington Mutual Inc. to produce fraudulent appraisals.

eAppraiseIT provided over 250,000 appraisals for Washington Mutual, Cuomo noted.

"Numerous e-mails showing First American and eAppraiseIT caved to pressure from Washington Mutual to use appraisers who provided inflated appraisals on homes," today's announcement said. "E-mails also show that executives at First American and eAppraiseIT knew their behavior was illegal, but intentionally broke the law to secure future business with Washington Mutual."

Home Valuation Code news

GSE News | Fannie/Freddie Share Statistics
Fannie, Freddie and FHLB news. Coverage of government sponsored enterprise regulation, operations and litigation.

Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
Mortgage broker, originator and banker criminal cases. Real estate flipping and appraisal fraud. Mortgage fraud prevention, studies and analysis.

Logout forgot

Mortgage Fraud Statistics
Government and private data on volume of mortgage fraud activity.

Mortgage Fraud Index
Dollar and index amount by quarter and state.

Mortgage Fraud Litigation
Lawsuits and settlements invoving mortgage fraud by a lender insider. From 2007 through first-quarter 2013

Mortgage Fraud News
News stories about fraud committed against home lenders.

Mortgage Fraud Blog
Actions in mortgage fraud criminal and civil cases.

local mortgage fraud

mortgage fraud links

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders