There has been much written about bias in the property valuation industry, and it has become clear that mortgage lenders must take steps to ensure the appraisals (and AVMs) they use in lending decisions are not subject to bias.
Last year, the regulatory agencies, as well as HUD, FHFA, and Fannie Mae and Freddie Mac, issued their Final Interagency Guidance on ROVs, which creates clear expectations on mortgage lenders to formulate and execute programs to provide customers with access to ROV requests, as well as how to handle them once received. Final regulations were issued regarding AVMs as well to ensure they are not subject to conflict or bias.
There are a number of disclosure requirements that go along with this, as a means to notify customers that they have the ability contest an appraisal if they wish. Then, what do you do if the appraisal is in fact fatally flawed? Should (or can) you order a new one? What about charging the borrower a fee for that second one? Doesn’t that fly in the face of appraiser independence?
In this webinar, we’ll address all these important questions, as well as provide practical advice on how to incorporate this critical new requirement into your lending program.
What You’ll Learn
- Explanation of appraisal bias – what is it and where can it be found?
- Requirements to have valuation guidelines in place
- Many links to regulatory guidance – there is help out there!
- How do I handle the AVM requirement? What must we do?
- What exactly is a Reconsideration of Value request? What do I do once I receive one?
- Interplay with complaint management processes
- What is a “deficiency” that should be addressed?
- When can we get a second appraisal? Can/should we charge the borrower for it?
- Communications and working with appraisers
- Usage of third parties such as AMCs
- Utilization of AVMs and other automated solutions
- Interplay with appraiser independence
- Policies, procedures, and controls, including examples
- Disclosure to customers around their right/ability to request an ROV
- Resolving the ROV – it’s not always about getting a second appraisal
- Timelines – when should all this be done? Are there deadlines?
- Additional requirements for FHA and Fannie/Freddie lenders
Who Should Attend
This session is ideal for real estate lenders, compliance officers, auditors, underwriters, appraisers (in-house or external), closing agents, management, and anyone else involved in the real estate or residential lending process with a need to understand the current state of appraisal regulation and requirements.