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.

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