At what should be a great time to buy a home, a new hurdle has been introduced – the Home Valuation Code of Conduct. From May 1 Fannie Mae and Freddie Mac, now semi-government institutions, cannot provide funds for mortgage loans through their chosen channels unless the appraisal complies with new guidelines which prohibit brokers from ordering appraisals directly from a licensed real estate appraiser. Lenders are now required to use a third-party appraisal management company.

One of the problems created by this new regulation arises when a loan officer improperly qualifies a buyer or runs into a new underwriting rule that declines their loan. Where previously the loan could be repackaged and sent on to a new source, appraisals now belong to the lending source and cannot be passed on. Therefore a second appraisal must be ordered and paid for by the buyer, and if that is declined, a third.
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