Real estate appraisers, particularly those operating in rural areas of the U.S., have admitted that the Home Valuation Code of Conduct had affected their business in some way or another. The Code was introduced in 2009 and was developed by mortgage giant Fannie Mae.
Under the code, appraisers are required to collaborate with the appraisal service management units of lenders instead of the individual or group who are putting the mortgage loan together for the property being appraised. According to market experts, the Code was implemented to create a buffer between lenders and property appraisers and avoid collusion between these two.
The Code will supposedly prevent lenders who write the loan mortgages from influencing appraisers in their evaluation of a property and in deciding what the property's worth should be. The Code has been deemed largely successful by most industry observers, although some appraisers have admitted that it does have some negative impact.
Rural real estate appraisers have stated that it sometimes pose a problem, particularly if the appraisal unit of the lender is based outside the area where the property that will be appraised is located. They stated that most city appraisal companies have no idea how things are done and how properties are appraised in rural regions.
They also added that it is somehow cumbersome to have to drive to a farther location just to talk with the appraisal unit since most banks have their appraisal firms in another location. They stated that if the Code were not in place, they could just walk across the road and talk with the bank issuing the mortgage for the property.
Despite these small concerns, appraisers have asserted that the Code has done a lot of good for the housing industry. Generally, the impact on their businesses is not detrimental, although they stated that it increased the workload of their office managers who are tasked with putting together documents and facilitating communication between the appraisal firm and the appraisal unit of the lender which is almost always located outside the local area.
Most real estate appraisers have also admitted that they would have preferred to use local appraisal servicers since they are the ones who knew the nature of the city or the county's housing market.
