Appraisal Relief

Finally, it looks like we may a have little help with some of the horrible appraisal issues.

For the last few years lenders have been undervaluing properties.  They would not only order an on-site appraisal but many times they would also do a "desktop appraisal" which is slightly better than checking Zillow.  Upon receiving the on-site appraisal conducted by a certified appraiser, the lender would would question it based up the information that they received from their desktop appraisal.  They then refuse to accept the full value given by the appraiser.

The reason lenders have gotten into the routine of undervaluing properties is because of Fannie Mae's policies on over-valuing.  Any lender caught over-valuing properties could be forced by Fannie Mae to buy back the mortgage at a substantial cost.

Starting September 1st lenders selling their loans to Fannie Mae will no longer be able to arbitrarily reduce appraisal values.  If they don't agree with the appraiser's value they may contact the appraiser in an attempt to resolve the disagreement.  If they are not able to come to an agreement, the lender may then order a second appraisal.  In either case, the lender will not be allowed to simply drop the value that supports a sales contract.

Hopefully, this will help hold values and prevent delayed closings due to appraisal issues.  If you'd like to read more please read the full article from the Florida REALTORS website.