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Showing posts from August 31, 2009

Assessing Mortgage Appraisals

Chicago area real estate contract live or die depending on the results of mortgage lender appraisal reports. If the property value does not justify the loan, the contract is going nowhere.

As the market defalted over the last two years, many of my clients saw contracts collapse based on low appraisals.

A great many Chicago area Realtors, bloggers and other real estate pundits were quick to place blame for low property valuations on the Home Valuation Code of Conduct that became effective this past May. Frankly, the low appraisals were already a problem long before HVCC went into effect. For all the uproar, I am seeing a rather interesting (positive) trend of late. More on that in a moment. First a quick recap.

The HVCC is not so much law, as it is the result of an agreed settlement entered into by Fannie Mae, Freddie Mac, and the office of the New York State Attorney General.

The idea was to stem the tide of appraisal fraud and abuse by changing the way that lenders select their mortgage…