Appraiser Independence & Residential Appraisal ServicesWhat Happened to the Home Valuation Code of Conduct (HVCC)?The Home Valuation Code of Conduct (HVCC) was introduced in 2009 as part of efforts to strengthen appraiser independence and prevent inappropriate influence over residential property valuations. However, HVCC is no longer the current industry standard. In 2010, Fannie Mae and Freddie Mac replaced the HVCC framework with the Appraiser Independence Requirements (AIR). The AIR framework continues to establish requirements designed to protect the independence, objectivity, and impartiality of appraisers involved in residential mortgage transactions. Today, appraiser independence remains an important component of the residential mortgage lending process. Fannie Mae's current AIR states that no person may influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, intimidation, compensation, inducement, or other improper means. Why Is Appraiser Independence Important?A residential real estate appraisal should provide an independent and objective opinion of market value based on the appraiser's analysis of the property and relevant market data. An appraiser must be able to analyze the property, select appropriate comparable sales, consider relevant market conditions, and develop an opinion of value without being pressured to reach a predetermined result. At DiCicco & Associates, independence and objectivity are fundamental to our appraisal practice. Our responsibility is to analyze the available market evidence and report our professional opinion of value—not to reach a value requested or desired by a borrower, lender, real estate agent, seller, or other party. What Does Appraiser Independence Mean for You?Whether you are a homeowner, lender, attorney, real estate professional, or other appraisal client, you should expect an appraisal to be based on relevant property and market information. A professional residential appraisal considers factors such as:
The appraiser's role is to analyze these factors and develop a credible opinion of market value supported by the available evidence. Who Can Order a Mortgage Appraisal?For mortgage transactions subject to Fannie Mae's requirements, the lender or an authorized party is responsible for selecting, retaining, and compensating the appraiser. Fannie Mae permits lenders to use authorized third-party vendors, including appraisal management companies (AMCs), to manage the appraiser selection process. This does not mean that communication between an appraiser and other real estate professionals is prohibited. Fannie Mae's current guidance specifically recognizes that real estate agents and other parties can provide valuable information. What is prohibited is communication intended to influence the development, reporting, result, or review of the appraisal. What Is the Appraiser's Responsibility?A professional appraiser is responsible for independently developing and communicating an opinion of value based on the assignment's intended use, applicable requirements, professional standards, and available market evidence. Fannie Mae requires appraisers used by lenders for its transactions to be appropriately licensed or certified under applicable state law. Fannie Mae also states that the quality of an appraiser's work must be a key consideration in selecting an appraiser. At DiCicco & Associates, we take this responsibility seriously. Our goal is to provide credible, well-supported residential appraisal reports that clearly communicate the reasoning and market evidence supporting our conclusions. Mortgage Appraisals and Private AppraisalsAppraiser independence is important not only in mortgage lending but also when an appraisal is obtained for other purposes. DiCicco & Associates provides residential appraisal services for a variety of assignments, including:
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