Tough new appraisal laws in Texas

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.

Jeff Kuns, owner of the Mortgage Advisor’s Group gives the following advice: Home owners should ensure they are properly qualified by the loan officer before looking for a home, by asking to see their approval. Lenders should also ensure that clients are approved for purchase well before they choose a home, to avoid later disappointment.

This entry was posted on Thursday, October 15th, 2009 at 11:58 pm and is filed under Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.