(Source: Wall Street Journal)
New rules aimed at making home appraisals more accurate are raising costs and prompting longer waits to get to the closing table, some in the mortgage industry say.
The new rules — known as the Home Valuation Code of Conduct and in effect less than three months — have driven up the cost of appraisals, says Keith Stewart, a mortgage consultant with NorthPoint Lending Group in Chicago.
An appraisal that once cost $275 to $300 now runs $375 to $500, he says. That’s because under the new rules a third party, often an appraisal-management company, must serve as middleman between a mortgage broker and the appraiser, says Drew Kessler, director of sales for Rand Mortgage in New City, N.Y.
A bill in the U.S. House of Representatives proposes a moratorium on the new rules, as some in the industry are concerned the code will slow recovery in the housing market.
But the Federal Housing Finance Agency says the new code of conduct is necessary to make sure homes are appraised correctly and fairly. The code went into effect in May and applies to conforming mortgages, which are those that are able to be sold to Fannie Mae and Freddie Mac, the troubled government-backed mortgage agencies.
Read Amy Hoak’s full article “New Appraisal Code Raises a Row” in the Wall Street Journal (July 26, 2009).