A story I’ve been following finally came to a close last week, and it’s got me thinking. Our industry is in store for an overhaul. No one is quite sure what it’s going to look like this time next year.
As some of you may know, New York Attorney General Andrew M. Cuomo laid out a plan last week to keep the current mortgage crisis from recurring. It is an agreement between his office and Fannie Mae and Freddie Mac; beginning January 1, 2009, the two largest purchasers of home loans will buy home mortgages only from those lenders who meet new standards. These standards are set in the Home Valuation Protection Code.
Under the new code, mortgage brokers will be prohibited from selecting appraisers and lenders prohibited from using "in-house" staff appraisers to conduct initial appraisals. In addition, a new Independent Valuation Protection Institute will be formed to insure these standards are followed.
Over the next 90 days, Cuomo’s office is accepting comments in an attempt to tweak this code so that its main purpose of insuring appraisal independence will not cause undue hardship or chaos. If you have a chance, I encourage you to read the new code and think about its implications, and send your comments to Cuomo if anything strikes you.
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