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Fannie Mae and Freddie Mac published new Reconsideration of Value policies after collaborating with the Federal Housing Finance Agency and Federal Housing Administration.
Background: ROVs are requests from financial institutions to appraisers or other preparers of valuation reports to reassess the value of residential real estate.
New Policies: The enterprises’ new policies:
Are designed to provide clear requirements for lenders to disclose and outline the ROV process for consumers, standardize communication to appraisers, and establish ROV response expectations.
Require lenders to refer appraisers to local, state, and federal agencies for violations of anti-discrimination laws.
ICBA View:
In a comment letter last year to federal banking regulators, ICBA said bias and discrimination have no place in the valuation process, cautioned that excessive or inappropriate use of ROVs may result in increased costs or delayed closings for the consumer, and encouraged regulators to clarify that ROVs alone may not be the most effective way to address alleged bias and discrimination.
ICBA previously called on the Department of Housing and Urban Development to clarify lender obligations under draft guidance on borrower requests for ROVs of FHA loans.