The New and Improved ROV...

[djd09]

Originating & Underwriting

Appraiser Update June 2024​

Reconsideration of value — rights and responsibilities​

On May 1, 2024, Fannie Mae published a new reconsideration of value (ROV) policy, which standardizes elements that must be part of a lender’s borrower-initiated ROV policies and procedures. It formalizes a framework for borrowers to appeal an appraisal on their own behalf. This policy is designed to create a balanced approach for informing borrowers of their rights and responsibilities while maintaining appraiser independence and standardizing operations for lenders. Requests for an ROV are not new to the industry, with each lender historically having their own policies. However, the lack of standardization can be confusing for borrowers.

Lender responsibilities​

Lenders will provide a disclosure to borrowers outlining the ROV process including submission requirements at the time of the loan application and again when the appraisal report is provided to the borrower. Lenders must complete their appraisal review before initiating the ROV process, designate an underwriter or other appraisal subject matter expert to review any ROV requests, and validate that the request from the borrower contains sufficient supporting evidence prior to sending to the appraiser. If the borrower’s request for an ROV is validated, the lender must send a standardized communication to the appraiser that contains all of the following:

• Borrower(s) name, property address, effective date of the appraisal, appraiser name, and date of the ROV
• Identification and description of unsupported, inaccurate, or deficient areas in the appraisal report
• Additional data, information, or comparable properties, not to exceed the maximum of five
• A definition of turn-time expectations for communicating ROV results
• Instructions for delivering the ROV response as part of a revised appraisal report that includes commentary on conclusions regardless of the outcome
• A reference for appraisers on how to correct minor appraisal issues or nonmaterial errors not related to the ROV process
  

Lenders are also required to report unresolved material deficiencies or evidence of unacceptable appraisal practices to the appropriate appraisal licensing agency or regulatory board and to report suspected overt violations of anti-discrimination laws to the proper local, state, or federal agency.

A best practice for lenders is to include the definition of turn-time expectations for possible ROVs in the initial appraisal engagement letter. Regardless, all of the lenders’ ROV policies and procedures must be aligned with Appraiser Independence Requirements (AIR).

Appraiser responsibilities​

After receiving the request from the lender, the appraiser must analyze the relevance of the information provided with the ROV. Regardless of whether the ROV request results in a change in value or not, a revised appraisal must be provided within the defined time frame with a description of the points in dispute and the outcome.

Appraiser rights​

This policy aims to protect appraisers’ rights through two mechanisms: First, ROV requests must meet minimum information requirements and be deemed relevant to support the dispute by the lender’s validation process. It limits the number of alternative comparables that can be shared with the appraiser to five. Also, it limits the borrower to one ROV request per appraisal. Second, it makes clear that the ROV policy in no way supersedes or changes our AIR.

The standardized ROV policy is in place to educate borrowers about their right to appeal an appraisal on their own behalf and how to do it, while creating uniform expectations on how to manage ROVs and maintaining appraiser independence. Transparency in the work performed during this process will increase lender confidence that they are receiving high-quality appraisal reports and will increase public trust in the appraisal profession.

Appraiser Update June 2024 | Fannie Mae

Welcome to our June 2024 Fannie Mae Appraiser Update.

singlefamily.fanniemae.com

pucker up...buttercups

 

[Jerry Bone Jr]

Appraiser responsibilities​

After receiving the request from the lender, the appraiser must analyze the relevance of the information provided with the ROV. Regardless of whether the ROV request results in a change in value or not, a revised appraisal must be provided within the defined time frame with a description of the points in dispute and the outcome.

​

The appraiser is not prohibited from charging for this "revised appraisal" report.

 

[Tom D]

Charging, dat funny. Lenders are also required to report unresolved material deficiencies or evidence of unacceptable appraisal practices to the appropriate appraisal licensing agency or regulatory board and to report suspected overt violations of anti-discrimination laws to the proper local, state, or federal agency.

 

[Non Sequitur]

Appraiser rights
This policy aims to protect appraisers’ rights through two mechanisms: First, ROV requests must meet minimum information requirements and be deemed relevant to support the dispute by the lender’s validation process. It limits the number of alternative comparables that can be shared with the appraiser to five. Also, it limits the borrower to one ROV request per appraisal. Second, it makes clear that the ROV policy in no way supersedes or changes our AIR.

Appraiser rights? Notice there's ZERO protection if an appraiser is falsely accused of incompetence or bias by the lender or borrower.

 

[Tom D]

You gotta have hit that number insurance in the back of your easily manipulated appraiser brain for self protection.

There seems to be an avalanche of bad appraiser impressions heaped upon us. I guess it will make it easier to kill off the walking dead, waiting for the next boom.

 

[Tom4value]

I love the new guideline!

1. Borrowers do have a right to question the results.
2. Provides a standard procedure. I have a client who was not aware of it and asked if I was ok with contacting the borrower to “discuss it”. I was now able to say no and informed them of the procedure.
3. The guideline calls for a form that the underwriter has to review first, allows for alternative sales only and, most importantly, only allows 1 appeal. Gone are the, “no? Ok, how about these, then?”

Going back to #1, by giving the borrower a procedure, the goal is to prevent lawsuits based on willy nilly complaints.

I became aware of this at the Appraisal Expo in Vegas in September. I thought it was odd that they were focused on helping appraisers feeling pressured to change their value. I took it as a way to have a procedure to stand by my value.

 

[djd09]

arguing numbers with an unintended user...is a no win for the independent appraiser

 

[DTB]

designate an underwriter or other appraisal subject matter expert to review any ROV requests, and validate that the request from the borrower contains sufficient supporting evidence prior to sending to the appraiser

Maybe there will be some teeth there for appraisers to report underwriters or appraisal subject matter experts when they fail to meet their requirements?

 

[djd09]

maybe they should provide their own appraisal so the playing field is more level...

 

[Tom4value]

arguing numbers with an unintended user...is a no win for the independent appraiser

There is no forum for an “ unintended user”. All ROVs must go through and vetted by the lender.