Appraiser Independence Requirements Policy Manual

Fannie Mae and Freddie Mac issued notices regarding new Appraiser Independence Requirements and require that seller/services establish internal procedures to comply with the federal rules for Appraiser Independence. Both Fannie Mae and Freddie Mac require that all single-family loans they purchase adhere to standards for solicitation, selection, compensation, and practitioner independence when it comes to home appraisals.

Overview

Get your policies in place with the AllRegs Appraiser Independence Policy Manual. This turnkey manual outlines the requirements issued under Section 1472, Title XIV Mortgage Reform and Anti-Predatory Lending of the Dodd-Frank Act. Four key chapters spell out the rules established by the Consumer Financial Protection Bureau, Fannie Mae, Freddie Mac and HUD. It delivers clear policy and procedures to comply with Truth in Lending Section 1639e, including prohibited practices, permissible conduct, customary and reasonable compensation. The federal compliance section also includes the Interagency Appraisal and Evaluation Guidelines for regulated institutions.

Separate chapters for Fannie Mae and Freddie Mac address those requirements unique to each agency. FHA requirements address appraiser assignment, FHA connection ordering, DE underwriter responsibility and other rules for compliance.

The Appraiser Independence Policy Manual is ideal for:

  • All operations personnel including origination, processing, underwriting, closing and QC staff of the following:
    • Lenders approved by HUD as a Title II submission of one-to-four family housing applications for Federal Housing Mortgage Insurance
    • Supervised institutions under the Federal Deposit Insurance Corporation (FDIC), Federal Reserve or the National Credit Union Administration (NCUA)
    • Lenders approved by Fannie Mae or Freddie Mac


Benefits

The Appraiser Independence Requirements Policy Manual features the following benefits:

  • Supports strong operational practices and preparedness
  • Set forth staff training requirements for this policy
  • Explains roles and responsibilities
  • Helps your business meet regulatory or internal compliance requirements
  • Add benefits specific to each PM

Optional Services

Maintenance: Receive regular and ongoing industry updates to keep your policy within regulatory requirements.

Publishing: Publish your manual, including your company procedures, in AllRegs Online to complete your policy manual solution.

Contact your account manager for information regarding these optional services!


Policy Manual
Appraiser Independence Requirements
Section Title Priority Action
1.1 Goals and Objectives Mandatory Review Include the point of view or culture of your organization in this section, if applicable.
1.2 Required Review Mandatory Review Be sure this accurately reflects your company’s annual policy review process.
2.1 Internal Controls Mandatory Review Include or reference related procedures in this section.
3 Staff and Training Mandatory Review Include the means by which your organization provides and tracks required training.
5 Interagency Appraisal and Evaluation Guidelines Optional Enhancement This section applies only to Regulated Institutions and their operating subsidiaries. Delete as applicable.
5.1 Selection of Appraisers or Persons Who Perform Evaluations Recommended Best Practice Include your selection procedures in this section.
5.4 Appraiser Engagement Recommended Best Practice Incorporate any safeguards used in your organization to prevent selection influence or interference from production staff.
5.6 Transfer of Appraisals Mandatory Review Revise this section to align with your policy for appraisal transfers in accordance with agency requirements.
6.1 Appraiser Quality Monitoring (AQM) Optional Enhancement This section defines the role of Valuation Manager. Review and revise according to your organizational structure.
6.4 Post-Closing Quality Control Review of Appraisers & Appraisals Optional Enhancement You may wish to insert a reference to existing Quality Control procedures here.
8.3 Preventing Improper Influences on Appraisers (FHA) Optional Enhancement Small lenders should incorporate process safeguards to prevent interference or influence from the mortgage production staff.