OLYMPIA, Wash. (Legal Newsline)-Washington Attorney General Rob McKenna is being urged to reject a proposed Home Valuation Code of Conduct aimed at eliminating personal contacts between appraisers and people who have an interest in a home sale going through.
The code is part of a settlement between the Office of Federal Housing Enterprise Oversight, mortgage companies Fannie Mae and Freddie Mac and New York Attorney General Andrew Cuomo.
The settlement requires that starting Jan. 1, appraisals would be barred that are done by in-house appraisers or subsidiaries or affiliates of lenders or that are ordered by a mortgage broker.
Cheryl Farivar, chairwoman of the Washington Real Estate Appraiser Commission, and Ralph Birkdahl, manager of the state Department of Licensing’s Appraiser Program, are asking McKenna not to enter into the agreement, noting it could “seriously constrain” the appraisal profession.
In a letter this week to McKenna, they wrote that the code of conduct would not provide “any meaningful protection to appraisers or homeowners” in the state.
“We do not believe that the HVCC will have any positive effect on the integrity of the lending and appraisal process,” they wrote to the Republican AG.
“The HVCC as written will result in most residential appraisals being ordered through ‘third party’ appraisal management companies, a practice which can only result in creating a new layer of consumer cost and potential delay,” the letter said.
The letter noted that many so-called third party appraisal management companies typically force appraiser fees down by taking a substantial percentage of the typical appraisal fee charged to the client.
“This practice will likely force many of the best appraisers out of the business, something the appraisal profession can ill afford,” they wrote.
From Legal Newsline: Reach reporter Chris Rizo by e-mail at email@example.com.