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FHFA Responds to Letter Requesting Appraisal Flexibility for Refinance Transactions

Apr 28, 2020
 
On April 6th ASA, along with several professional appraiser organizations, sent a letter to the Federal Housing Finance Agency (FHFA) asking for increased flexibility in conducting appraisals in connection with refinance transactions. Currently, the vast majority of refinance transactions still require that the appraiser perform an interior inspection as part of the assignment.

In response on April 27th, the FHFA acknowledged the flexibilities Freddie Mac and Fannie Mae are providing to lenders and borrowers to help support purchases during this unprecedented time. However, the FHFA insists that the flexibilities the GSE’s are providing are not the answer to all lending scenarios due to differing refinance loans held outside of the enterprises. Further, while the FHFA is familiar with emerging virtual and data-driven technologies that – in conjunction with an exterior appraisal – could substitute for an interior appraisal, they are not looking to implement these technologies into the appraisal process due to the potential risks a new process may create.

ASA appreciates FHFA’s timely response to the letter, though is disappointed at the continued insistence that appraisers enter homes during the Covid-19 pandemic. ASA reminds all appraisers to make informed decisions when accepting assignments, and to exercise caution when entering homes.