Fannie Mae announced the development of new Appraiser Independence Requirements (AIR) to replace the Home Valuation Code of Conduct (HVCC). The Appraiser Independence Requirements are very similar to the HVCC and are applicable to all Conventional loans with an application date on or after October 15, 2010 (the date of FNMA Announcement SEL-2010-14).
The core principles regarding appraiser independence have not changed, but there is one new requirement regarding the “Borrower Receipt of Appraisal” section. In both the HVCC and the AIR the lender must ensure the borrower is provided a copy of the appraisal report no less than three days prior to the closing of the loan. Both also state that the borrower may waive this three-day requirement. In the new Appraiser Independence Requirements, however, the borrower may only waive this three-day requirement if the waiver is obtained at least three days prior to closing.
- A new Appraiser Independence Requirements version of the Verification of Receipt of Appraisal (cx15224) will be included in all Conventional initial disclosure packages beginning Thursday, October 21, 2010. This will allow the waiver to be obtained before closing, as required by the new Appraiser Independence Requirements.
- The generic Verification of Receipt of Appraisal (cx14078) will still print in all Conventional closings. If the Application Date is on or after October 15, 2010, the doc will reference the Appraiser Independence Requirements instead of the HVCC. If the Application Date is not on or after October 15, 2010, the HVCC version will print just like it did previously.
In related news, the HVCC requirements were negated on Monday with the release of the interim final rule for appraisal independence by the Federal Reserve as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The text of the rule can be found at http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20101018a1.pdf. Compliance is optional until April 1, 2011.
None of the investors with custom HVCC forms have come out with new AIR versions yet. This is understandable since the new Appraiser Independence Requirements were effective for new applications the very day they were announced.