The appraisal process may be headed for a makeover.
The Federal Housing Finance Agency on Monday requested input on potential changes to “appraisal-related policies, practices and processes.” FHFA will take the input and decide if changes need to be made to ensure Fannie Mae and Freddie Mac are operating properly when it comes to appraisals.
FHFA is seeking input on:
- Appraisal modernization.
- The Uniform Appraisal Dataset (UAD) and the design of appraisal forms.
- Automated Valuation Models (AVMs) and appraisal waivers.
- Valuation differences by borrower and neighborhood ethnic makeup.
“Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences,” FHFA Director Mark Calabria said. “Today’s RFI will improve FHFA’s understanding of how the Enterprises can improve the appraisal process while at the same time ensuring they don’t take on unintended or inappropriate levels of risk. The comments we receive will inform how we will modernize appraisals to improve both loan quality and the origination process.”