NAR Reacts to Worry Over “Appraisal Time Bomb” Video

During the recent holiday break a number of members contacted NAR concerning a video they had been sent regarding changes coming to appraisals conducted for Fannie Mae transactions. The video was sent by email and usually contains the subject line “Appraisal Time Bomb.” Many of state and local association partners have received member inquiries about the video.

At the end of January 2015, Fannie Mae will make Collateral Underwriter (CU), an appraisal risk-assessment tool, available to lenders.  CU is an optional, free tool that lenders can use to assign a risk score to appraisals and identify aspects of the appraisal that may require further attention.  The tool can provide the lender a list of additional comps for possible appraiser review.  Members are concerned that this could add time to the appraisal process and force appraisers to use lower-value, lower-quality comps—a tool that appears to encourage lower-value appraisals.  Fannie Mae, however, hopes that the tool will be superior to current lender check-lists and engagement letters and feels it will prevent some of the call-backs appraisers receive from underwriters for additional or lower comps. For more information about the new CU Tool, Click here.

NAR insists that while the “Appraisal Time Bomb” video has received attention, it is not accurate. NAR is watching the roll-out of Collateral Underwriter closely and has asked members to give us feedback as soon as the tool is available and used by lenders at the end of January.

Here’s what NAR has been working on regarding CU:

• • NAR is proactively working with Fannie Mae on this issue.
• • NAR held a conference call with Fannie Mae to discuss CU in November 2014
• • NAR’s Real Property Valuation Committee and Conventional Financing and Policy Committee are actively engaged in the policy discussion about CU.
• • NAR asked Fannie to update its FAQ’s on their website to address appraiser questions.

Visit www.REALTOR.org for the latest information on the CU implementation. If you have any additional concerns or questions please contact Sarah C. Young, NAR’s Policy Representative for Appraisal Issues at: scyoung@realtors.org