DCUC, America’s Credit Unions Join Push To Shape New Appraisal Standards
By CU Today Staff —
WASHINGTON--The Defense Credit Union Council, America’s Credit Unions, and several joint trade associations have provided recommendations to the Federal Housing Finance Agency, Department of Housing and Urban Development, Department of Agriculture, and the United States Department of Veterans Affairs leaders regarding implementation of the Appraisal Modernization Act, which was enacted as part of the 21st Century ROAD to Housing Act.
In the joint letter, America’s Credit Unions, American Bankers Association, Broker Action Coalition, Collateral Risk Network, Community Home Lenders of America, Defense Credit Union Council, Housing Policy Council, Independent Community Bankers of America, National Association of Mortgage Brokers, and Mortgage Bankers Association expressed support for the Appraisal Modernization Act’s goal of creating a review and resolution procedure for a consumer-initiated reconsideration of value (ROV) or subsequent appraisal in connection with a consumer’s home loan.
“We believe that a standardized approach to the ROV process with uniform practices, such as common forms for borrowers, standard data fields for tracking purposes, and consistent procedural steps and requirements for all the parties involved, would benefit the government, industry, and borrowers alike,” the group wrote.
“We believe that a standardized process would provide borrowers, lenders, appraisers, and regulators with clear roles and responsibilities. A well-designed, uniform process will ultimately lead to better outcomes –enhancing the integrity of the appraisal process, preventing undue pressure for appraisers to meet a certain property value, and providing the covered agencies the information it needs to identify appraisers who fail to meet professional expectations,” the group continued.
The associations recommended that the simplest approach to implement the Act is for the covered agencies to align the ROV process with the collateral valuation standards already established by Fannie Mae and Freddie Mac (collectively, the GSEs).
“A single, uniform reconsideration of valuation process will facilitate compliance because lenders will perform the same process for all loan products and reinforce adherence to the new standards with common and enhanced quality control procedures,” the group explained. “If your policy teams determine that the GSE standards can be further strengthened, we recommend that the covered agencies work collaboratively to develop the new requirements.”
As an example, the associations shared how a comprehensive ROV approach could reasonably include standardized educational resources from the covered agencies, explaining that clear educational information and instructional materials for borrowers would help consumers navigate the ROV process, including what steps they may take and what information they will need to execute those processes, as well as what kinds of results they can expect.
The group requested that any additions to the GSE standards be adopted by all the covered agencies so that the market can maintain a standardized ROV framework.
“A fair, transparent, and consistent reconsideration of value process is essential to protecting borrowers and giving lenders, appraisers, and regulators a clear framework they can apply with confidence,” said Anthony Hernandez, DCUC president/CEO, ret. U.S. Air Force colonel. “By working together on a uniform approach, the covered agencies can strengthen the integrity of the appraisal process while helping credit unions better serve their members.”
Originally reported by CU Today.