We learn from a columnist post in the Boston Herald over the weekend about a new rules crafted by the Federal Reserve regarding appraisals. It’s not necessarily good news. The idea was for the Fed’s rules to modify appraisal rules put in place by Fannie and Freddie that some say resulted in cheap, quick appraisals by appraisers not familiar with the market.
The idea was for the new Fed rules to modify Fannie and Freddie’s “Home Valuation Code of Conduct” which was supposed to result in more-fair valuations less tied to influence from sellers or developers. It hasn’t worked out quite that way. Instead, the system seems to guarantee low-rate valuations that experienced appraisers balk at doing.
So this means appraisers willing to take very short fees come into the market…not from the local area…who are new to the appraisal business. The problem is that many are saying the Fed’s rules to modify this don’t go far enough. So now, the appraisal problem seems to be ready to be permanently enshrined.
File under: Thanks Fed, but no thanks.