In May of 2009, the Federal Housing Finance Agency (FHFA), and the State Attorney General of New York, promulgated the Dodd-Frank Act which was designed to protect the independence of appraisers and offer additional protection for consumers.
The act required that Mortgage lenders use third party Appraisal Management Companies to do their appraisal and prohibited lenders from having any conversations with the appraiser during the process.
As well intended as it was, the regulations caused delays in the process because of the addition of the AMC middleman, forced independent appraisers to align with an AMC, and drove up appraisal costs. It also drove most experienced appraisers from the market as the AMC’s found they could hire inexperienced help at a lower cost and boost their bottom line by doing so.
In a rare instance where common sense seems to have prevailed, the Dodd –Frank Act will be fading from the scene effective around October 21st and …..
Fannie Mae or Freddie Mac will now be able to accept any appraisal report completed by a selected appraiser or paid by a mortgage lender
Lenders will be required to pay agents at market rates
Loan originators will be subject to state and/or Federal laws that prohibit them from making payments, threats or promises to influence the report
--- Helene 9-20-2010
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