FHFA Issues RFI on Appraisal-Related Policies, Practices, Processes
The Federal Housing Finance Agency on Dec. 28 issued a Request for Input on appraisal-related policies, practices and processes. The input received in response to the RFI will be used by FHFA to determine necessary modifications needed to ensure Fannie Mae and Freddie Mac operate in a safe and sound manner.
The RFI covers four areas related to appraisals:
- Appraisal modernization;
- The Uniform Appraisal Dataset (UAD) and the design of appraisal forms;
- Automated Valuation Models (AVMs) and appraisal waivers; and
- Valuation differences by borrower and neighborhood ethnic makeup.
“Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences,” said Director Mark Calabria. “[The] RFI will improve FHFA’s understanding of how the Enterprises can improve the appraisal process while at the same time ensuring they don’t take on unintended or inappropriate levels of risk. The comments we receive will inform how we will modernize appraisals to improve both loan quality and the origination process.”
FHFA invites feedback on all the questions in the RFI by Feb. 26.