Regulator Criticizes Appraisal Agreement

New York Times (05/28/08) P. C4
The agreement Fannie Mae and Freddie Mac reached in March to buy only loans from lenders that receive appraisals from independent companies has come under criticism from John Dugan, the comptroller of the currency. In a letter to James Lockhart, who heads the Office of Federal Housing Enterprise Oversight (OFHEO), Dugan--the regulator of mortgage lending by national banks--says federal and state enforcement is the way to create a conflict-free environment for regulating mortgage lenders and brokers. The agreement, which is scheduled to take effect next year, should be withdrawn because its violates federal law and would have a negative impact on the mortgage industry, Dugan adds. Fannie Mae and Freddie Mac reached the real estate appraisal accord with OFHEO and New York Attorney General Andrew Cuomo to end an investigation into billions of dollars of loans the mortgage finance giants had purchased from lenders.