Values Go Down, Thanks to New Rules of Home Appraisal1 year ago
Home buyers that take out home loans insured by the government may soon learn that their brokers of mortgage cannot choose appraisers anymore. This has come about to make sure that appraisers do not get pressured into inflating values the of homes.
From next month onwards, brokers of mortgage won’t have the power to order loan appraisals that are FHA-insured anymore. This would mean that consumer home appraisals are going to reflect the value of a home much more closely since brokers that would usually profit from approved loans won’t be choosing appraisers that could declare higher values.
However, there are certain organizations that state that changes and other attempts to reform the industry of appraisal hurts both appraisers and consumers because the brand new rules that have come about are resulting in home values that are extremely low since the appraisers are not familiar or experienced with the local markets. Plus, these appraisers are also slower and take their time in getting things done, resulting in the returned values being lower than they should be.
The changes started last year when a code was adopted and made to divide loan officers from hiring appraisers. This code meant that loan production personnel, brokers and realtors can no longer hire appraisers. Instead, lenders have to turn to management companies that normally hire appraisers to get jobs done.
Although the entire process has now changed, it still remains to be seen whether it was a smart move due to the inexperience of the appraisers now being given out and their lack of knowledge regarding certain areas.