| Freddie Mac and Fannie Mae have agreed to only buy | | | | This agreements ends the practice of using lenders |
| mortgages for properties that have had appraisals by | | | | own appraisers and also ends the practice of lenders |
| firms independent from lenders. | | | | owning appraisal companies. It will be interesting to |
| This is a huge change for the mortgage industry! | | | | watch them as they divest themselves of these |
| This came about because of an agreement between | | | | functions. |
| the two largest mortgage brokers and the New York | | | | Interestingly, Countrywide Financial Corp. is one of |
| Attorney General. This will largely benefit independent | | | | the lenders who owned that type of company. We |
| appraisal companies. Lenders may now have to | | | | all know their current financial situation. |
| divest themselves of in-house appraisal services. | | | | It goes without saying that this change will cause |
| After investigating billions of dollars of home loans it | | | | massive ripples through out the industry. Independent |
| was found that lenders often put pressure on | | | | appraisal firms are poised to reap huge financial |
| appraisers to inflate values of homes. It doesn't take | | | | benefits as they step up to replace the lenders in |
| a brain surgeon to see how that may have | | | | house service. Expect to see new firms springing up |
| contributed to the unprecedented amount of | | | | to handle this huge volume of work. |
| foreclosures over the last few years. Appraisers | | | | How these changes will affect new home buyers |
| often were pressured to come with an amount that | | | | remains to be seen. It might be reflected in higher |
| would justify the amount being considered for | | | | costs to the borrower. |
| mortgages. | | | | |