directinvestornews.com

New appraisal rules instituted in May have caused confusion in the markets that has led to a backlash by the National Association of Realtors (NAR). Now, at NAR’s request, those rules are being reexamined.

Fannie Mae and Freddie Mac last week clarified the new Home Valuation Code of Conduct (HVCC) for home appraisers, which NAR said has caused delayed and lost sales.

NAR President Charles McMillan said that the rules, intended to keep appraisals independent from pressure from buyer or seller, caused an increase in the use of appraisers who were not from the local area.

In a clarification, the two mortgage giants said that lenders should use appraisers who have clear experience in the geographic area and that appraisers are not prohibited from talking to real estate agents, McMillan said.

NAR has asked Congress and the FHFA for an 18-month moratorium on the new HVCC rules to further address unintended consequences of this new rule.

According to some real estate analysts, the HVCC rules have led to a bias against rising property values, which is producing valuations that are too low.

Responding to the criticism last month, the Appraisal Institute said appraisers reflect the market and “sometimes, the markets don’t act like we want them to or hope they will.”