In Deal With Cuomo, Mortgage Giants Accept Appraisal Standards

New York Times (03/04/08) P. C3; Bajaj, Vikas
Effective in 2009, Fannie Mae and Freddie Mac will no longer purchase mortgages from lenders that use in-house appraisers, subsidiaries or affiliated companies to value homes, as part of an agreement with New York Attorney General Andrew Cuomo. The deal represents a victory for Cuomo, who received the support of federal banking regulators; however, the National Association of Mortgage Brokers warned that the deal could hurt competition, and the Office of Thrift Supervision expressed concern that "the closed-door fashion in which it was reached could result in negative unintended consequences." Also under the agreement, Fannie Mae and Freddie Mac will contribute $24 million to establish the Independent Valuation Protection Institute, which will be tasked with investigating consumer and appraiser complaints and ensuring that the new rules are enforced. Cuomo's office and the Office of Federal Housing Enterprise Oversight will monitor the institute. Cuomo has long worried about pressure placed upon appraisers and filed suit against First American Corp.'s appraisal subsidiary in 2007.