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On October 15, 2010, The Appraiser Independence Rule (AIR) replaced the Home Valuation Code of Conduct (HVCC). AIR includes additional requirements to enhance HVCC's objective of appraiser independence, robust protections for the entire housing market, including the lenders we serve, mortgage investors, appraisers and in particular, consumers.

The Appraiser Independence Requirements Enhancing the Independence of Appraisers

The Appraisal Independence Requirements (AIR) were developed by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (FHFA) and other stakeholders.

Appraiser Independence Safeguards

A. An "appraiser" must be, at a minimum, licensed or certified by the State in which the property to be appraised is located.

B. No employee, director, officer, or agent of the Seller, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Seller, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:

  1. Withholding or threatening to withhold timely payment or partial payment for an appraisal report;

  2. Withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser;

  3. Expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;

  4. Conditioning the ordering of an appraisal report or the payment of an appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached, or on a preliminary value estimate requested from an appraiser;

  5. Requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser's completion of an appraisal report;

  6. Providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the Borrower, except that a copy of the sales contract for purchase transactions may be provided;

  7. Providing to an appraiser, appraisal company, appraisal management company, or any entity or person related to the appraiser, appraisal company, or appraisal management company, stock or other financial or non-financial benefits;

  8. Removing an appraiser from a list of qualified appraisers, or adding an appraiser to an exclusionary list of disapproved appraisers, in connection with the influencing or attempting to influence an appraisal as described in Paragraph B above (this prohibition does not preclude the management of appraiser lists for bona fide administrative or quality-control reasons based on written policy); and

  9. Any other act or practice that impairs or attempts to impair an appraiser's independence, objectivity, or impartiality or violates law or regulation, including, but not limited to, the Truth in Lending Act (TILA) and Regulation Z, or the Uniform Standards of Professional Appraisal Practice (USPAP).

Does AIR change any of Fannie Mae's, Freddie-Mac's or HUD's requirements regarding the role of the appraiser?

No. The requirements for appraisers continue to be at a high standard of quality. Appraisers must provide complete and accurate reports; to report neighborhood and property conditions in factual and specific terms; to be impartial and specific in describing favorable or unfavorable factors; and to avoid the use of subjective, racial, or stereotypical terms, phrases, or comments in the appraisal report. The opinion of market value must represent the appraiser's professional conclusion, based on market data, logical analysis, and judgment. Appraisers certify to their respective knowledge and experience in appraising the type of property appraised in each market area. Appraisers must also be aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records, and other such data sources for the area in which the property is located.

At The Appraisal Hub, we ensure our systems and processes are built to be fully compliant with the Appraiser Independence Requirements and all other applicable laws, regulations and rules governing Appraisal Management Companies.

The sale of the following mortgages is excluded from the representation and warranty: FHA/VA Mortgages, Section 184 Native American Mortgages, and Section 502 Guaranteed Rural Housing Mortgages. Independent Valuation Protection Institute

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