HOW APPRAISAL MODERNIZATION IS IMPACTING MORTGAGE LENDING
Like every other part of the home finance business, appraisal modernization continues to
have an impact on the way mortgage lenders operate. The latest changes, announced by
Fannie Mae and Freddie Mac and in effect March 2022, are no exception.
On the surface, the new rules are making it easier for lenders to rely on desktop appraisals
for a larger subset of the nation’s housing stock. But there is some complexity built
into the new rules that could lead lenders to overestimate their short-term impact and
underestimate the long-term opportunity they will see in their lending business.
In this paper, we will take a closer look at the new rule and its impacts over both the short
and long-term and review some specific changes lenders can make now to get the most
benefit out of the new rules with the least disruption to their current businesses.
This will not be a line-by-line exploration of the new rules (something we will leave to the
lender’s compliance department), but rather a look at the impacts on the lender’s business.