![]() To mitigate any potential conflict of interest due to reporting relationships, Sellers should establish, maintain, and enforce written policies and procedures that are designed to reinforce independence. At an absolute minimum, the degree of separation should be no less than one level up in the reporting structure. Lenders should establish complete separation of appraisal activities from loan production activities. The Code states that members of the lender’s loan production staff who are compensated on a commission basis or who report to any officer of the lender not independent of the loan production staff and process are not permitted to order appraisals or influence the selection of appraisers. – For additional information regarding appraisers and appraisal requirements, please refer to our Freddie Mac Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-18 issued on July 10, 2009.Īre processors, closers, secondary marketing employees, underwriters, etc., permitted to order appraisals if they do not receive commission or incentives to close loans, but report up to a senior level employee who is responsible for loan production? – Appraisers must be familiar with the local market in which the property is located, must be competent to appraise the subject property type, and must have access to the data sources needed to develop a credible appraisal – Appraisers must be certified or licensed in the state in which the property is located, and must be eligible to perform appraisals in that state – Sellers must select appraisers in compliance with the terms of the Code Sellers must comply with the following requirements related to the selection of an appraiser: How do lenders determine the correct process for selecting an appraiser? Lenders may use appraisal management companies to obtain appraisals as long as they comply with the requirements of Section IV.C. of the Code for further information regarding who is authorized to select and retain appraisers.Īre lenders allowed to use appraisals ordered by appraisal management companies that provide other settlement services for the same transaction? ![]() The Code specifically prohibits lenders from accepting appraisal reports completed by an appraiser selected, retained or compensated in any manner by mortgage brokers and real estate agents. of the Code.Īre lenders permitted to use appraisers who have been selected or retained by a mortgage broker or real estate agent? Lenders are permitted to use in-house appraisers to obtain and prepare appraisal reports if the lender is in compliance with Section IV.B. Selection of Appraisers, Ordering AppraisalsĪre lenders permitted to use in-house appraisers to obtain appraisals? ![]() Lenders must represent and warrant that as of May 1, 2009, they have in place the structure, policies, and procedures required to comply with the Code and that appraisals used for mortgages with application dates on or after May 1, 2009, were obtained in a manner consistent with the Code. What does it mean to adopt the Code on May 1, 2009? If customers have immediate questions, they should contact their Freddie Mac account representative or email us using our Home Valuation Code of Conduct Inquiry Form. We will maintain ongoing contact through our various communications channels including newsletter articles and Web content. How will you handle issues and concerns raised by customers as the Code is implemented?įreddie Mac will work with our customers to address any issues or concerns regarding implementation of the Code. ![]() It does not apply to a lender’s foreclosure/REO process, workouts, or any other type of loss mitigation activity. The Code only applies to the loan origination process. On and after May 1, 2009, Freddie Mac will not purchase mortgages from Sellers that do not adopt the Code with respect to single-family mortgages that are delivered to Freddie Mac.ĭoes the Code apply to non-origination valuation activities such as loss mitigation activities?
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