The New Appraisal Rules

The HVCC (Home Valuation Code of Conduct) prohibits borrowers from paying for appraisals directly and seeks to maintain appraisers' objectivity.

• Brokers cannot order appraisals when working with loans that will be sold to Fannie Mae and Freddie Mac, former government-sponsored enterprises now under conservatorship. This is the most-notable section of the code. Lenders have been formulating procedures for appraisal ordering, including when and how to order them. For now, brokers can continue to order appraisals for FHA-insured loans and for loans that are not sold to Fannie Mae and Freddie Mac.
  
• When working with loans that will be sold to Fannie Mae and Freddie Mac, brokers apparently will have to submit loan packages without appraisals. Among other things, this could make it difficult to complete an accurate Truth-in-Lending statement.
  
• Many large lenders that already use appraisal-management companies likely will establish procedures involving mortgage brokers. Other lenders likely have been distracted by the mini-refinancing boom and have not yet formulated a policy.