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ASA, Other Appraisal Groups Urge Additional Appraisal Flexibility for Refinance Transactions During COVID - 19

by Todd Paradis | Apr 07, 2020
 
On April 6 ASA, along with three additional professional appraiser organizations, are asking the Federal Housing Finance Agency (FHFA) to allow for increased flexibility in conducting appraisals in connection with refinance transactions during the COVID – 19 pandemic. Outside of loans already owned by Fannie Mae or Freddie Mac, interior inspections are still being required for refinance transactions. This requirement creates unnecessary risk to all parties involved, especially appraisers and homeowners, when there are safer alternatives available.

An additional layer of complexity comes from whether real estate appraisers are considered “essential” worker. While essential worker guidance regarding COVID – 19 differs from state to state, more states are viewing appraisers as essential workers. However, the guidance being issued is not clear in every state and, in some instances, appraisers are not deemed essential. This has resulted into a situation where homeowners in certain states do not have the opportunity to refinance.

Moreover, individual appraisers are forced to decide between providing appraisal services during the pandemic – thereby exposing themselves, homeowners, or renters at risk of exposure – or turning down these assignments and dealing with the economic impact of fewer assignments. With greater appraisal flexibility for refinance transactions, appraisers would be able to provide reliable appraisals in connection with refinance transactions without any of the health risks currently involved.

ASA and our colleagues do not believe mandating interior inspections is the only option to reduce risk in refinance transactions. Enhanced measures could be taken in addition to exterior inspections, such as virtual inspection technology. Additionally, new protocols could be created that would result in a safer alternative to interior inspections. ASA and its partners believe with more flexibility and guidance, refinance transactions can become safer for all parties involved.

ASA joined with the Appraisal Institute, the American Society of Farm Managers and Rural Appraisers, and MBREA in sending the letter. To read the letter sent to FHFA, click here.