Within three months of its implementation, the Home Valuation Code of Conduct - pertaining to new rules for making US home appraisals more accurate – has apparently garnered opposition for raising costs and prompting tedious waits to reach a closing.
While the Federal Housing Finance Agency opines that the new code of conduct is aimed at ensuring fair and correct home appraisals; the mortgage industry that these appraisals – which essentially are informed judgments regarding the value of specific properties – are subject to bias since the information available may be less than complete.
In the opinion of Keith Stewart, a mortgage consultant with Chicago’s NorthPoint Lending Group, said that it is quite evident the new rules have driven up the cost of appraisals, since the appraisals that earlier cost $275 to $300 now run up to $375 to $500.
Drew Kessler, Director of Sales for Rand Mortgage in New City, New York, said that the rise in appraisal costs have resulted from the fact that the new code has a third party – mostly an appraisal-management company - serving as a mediator between a mortgage broker and the appraiser.
Since the general opinion in the mortgage industry apparently is that the new appraisal code may likely slow the recovery in the housing market, a bill in the US House of Representatives has proposed a moratorium on the new rules.