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Editor’s Note: This opinion piece calls for transparency from Fannie Mae on AQM, on behalf of appraisers.
Troubling Times at Fannie Mae
by David Brauner, Editor
Appraisers should be concerned by Fannie Mae’s lack of transparency about its Appraiser Quality Monitoring system (AQM). In their published guidance and in various interviews, in the upcoming print edition of WRE (January 2015) and elsewhere, they remain mum on the specifics of a process that can potentially end an appraiser’s career.
If they have rules, procedures and guideless in place to evaluate the work of appraisers in a fair and consistent manner, they are not making the details public. We believe it’s time that they do so.
This is from the cover story in the upcoming print edition of WRE, now in production:
Just as Fannie Mae promised in their July 2014 AQM FAQ, appraisers are now beginning to receive warning letters that their appraisals contain inconsistencies, inaccuracies, or data anomalies that may warrant “further action” should such behavior continue. Fannie Mae says that the intent of these communications is for “training and educational purposes” and to provide appraisers with an opportunity to improve their work before Fannie places them on the AQM (do not use) list. Appraisers across the country are receiving such letters from Fannie currently.
In their written response to WRE, Fannie Mae seems to be saying “trust us.” Simply follow Fannie Mae requirements and you will have nothing to worry about.
To its credit, Fannie Mae has laid out examples of unacceptable appraisal practices in their published guidance; FNMA’s 16 Deadly Sins, as Richard Hagar, SRA calls them in his WRE/OREP webinar Keeping off Fannie Mae’s New Appraiser Black List. But who is making the often subjective determinations on these infractions and using what criteria? How does the review process work? Who sits on these ominous sounding “review panels/management committees”? These folks may hold your career in their hands someday- do you blindly “trust them” to be fair? What are their credentials? Do they have local competency? How qualified and experienced are they? What’s the mix of automation and human review? How are appeals handled? As this process kicks into high gear, will Fannie Mae have sufficient staff to review every rebuttal thoroughly, fairly and in a timely manner- while you wait with your livelihood on hold? Is the process open, fair and consistent? If it is, please show us.
We know of at least one appraiser who had to sue HUD to get the agency to follow its own guidelines to give him due process. Fannie Mae has yet to publish guidelines: how will they be held accountable? Meanwhile, the process is moving forward with appraisers getting warning letters every day. Fannie Mae is running AQM in secrecy and with no accountability to appraisers. Fannie Mae continues to hold its cards close to the vest and the career ending consequences of running afoul of AQM make it incumbent upon them to open up about the specifics of how this process works. If their aim is truly to correct bad appraising, this should be a no-brainer.
“Thank you. I really enjoyed the webinar and put the information from it into immediate use. Now I have all kinds of graphs and charts in my workfile.” – S. Forstner
Part 1: How to Support and Prove Your Adjustments
Richard Hagar, SRA explains the most common appraisal pitfalls when determining adjustments and shows you how to provide the proper support, analysis and documentation for adjustments in your appraisal report and workfile. This course will help you understand and utilize quick and simple methods for proving adjustments and help you avoid problems, blacklisting and legal actions. Watch Now!
Part 2: Fannie’s AQM: Understanding Quality and Condition Ratings
In 2014 so far, Fannie Mae has issued numerous “updates” and changes to their AQM policies, including additional requirements with respect to its Quality and Condition Q&C ratings. In this webinar, Hagar provides a blueprint for staying on Fannie Mae’s good side by understanding how to determine Q&C ratings and adapt to Fannie’s changing requirements. Watch Now!
About the Author
David Brauner is Editor of Working RE magazine and Senior Broker at OREP.org, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 49 states (OREP.org). He has covered the appraisal profession for over 20 years. He can be contacted at firstname.lastname@example.org or (888) 347-5273. Calif. Insurance Lic. #0C89873.
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