Real Estate Appraisal New Law
On 1st May 2009, the Home Valuation Code of Conduct came into effect. This new law set standards for soliciting, selecting and compensating appraisers, while establishing independence of an appraiser and preventing conflicts of interest. The law was meant to govern mortgages that were sold to Fannie Mae and Freddie Mac, and did not cover mortgages guaranteed by the FHA and Federal Home Loan Bank. (See Reference 1) |
This real estate appraisal new law was established to protect appraisers and their independence, and also protect the housing market, consumers and mortgage investors. The stipulated that mortgage lenders would have to hire third party appraisal management companies to appraise a said property and they were banned from having any contact with the appraisers while the appraisal process was going on. (See Reference 2)
This new law meant that independent appraisers had to be part of appraisal management companies now. However, a few months later a new act, the Dodd-Frank Act, was signed. This act replaced the Home Valuation Code of Conduct and established new standards to ensure appraisal independence. (See Reference 2)
The Dodd-Frank Act stipulates that Fannie Mae and Freddie Mac can accept any appraisal done by a appraiser selected or paid by mortgage lenders, the mortgage lenders would have to hire agents as per the prevailing market rates, and loan originators would be governed by state as well as federal laws that ban them from influencing a report either through payment, threat or promise. (See Reference 2)
So, the Dodd-Frank Act is the real estate appraisal new law that has come into effect.
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Real Estate Appraisal New Law
There are many laws that are followed when it comes to real estate. Hence, it often takes a real estate lawyer to understand the legal aspects of real estate and specialized lawyer is the best person to consult when you have any doubts about real estate laws. 
