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New regulations impact mortgages, closing dates, appraisals

Home Appraisals impacted by HVCC

It's a new ballgame and the rules for appraising real estate have changed

 Effective May 1, 2009 Fannie Mae® and Freddie Mac® adopted the Home Valuation Code of Conduct (HVCC) to reinforce appraiser independence, valuation protections, and enhance the overall integrity of the valuation process.

HVCC was inacted to increase the accuracy of appraisals by shielding appraisers from undue influence and to
ensure that borrowers have notice of appraisal content by than 3 business days prior to the closing of their loan.

On July 30, 2009 additional regulations, Housing and Economic Recovery Act (HERA) go into effect.  These regulations  are intended to:

• Provide transparency and regulation to the real estate industry
• Add additional steps geared to prevent deceptive lending practices
• Provide consumers more information about home financing

Below are four things every home buyer and home seller should know:

• The new guidelines set specific time lines, and will impact closing dates.  Even a rus transaction will have the restrain of a seven business day wait AFTER the homebuyer is issured mortgage disclousres.
• Upfront fees necessary to begin the lending process (e.g. credit report, appraisal) cannot be collected until the buyer receives initial disclosures. 
• The appraisal must be completed and a copy given to the home buyer a MINIMUM of 3 days prior to closing.
• The Truth in Lending statement MUST be revised and reissued if the APR increases more that .125% from the initial Truth in Lending statement.

The following calendar (thanks to Liz Chiardi of Wells Fargo) depicts a best case time line: