ABA Supports Appraisal Modernization for Fannie, Freddie

The American Bankers Association today offered feedback to the Federal Housing Finance Agency on appraisal-related policies and practices for Fannie Mae and Freddie Mac, noting that it “fully supports creating new alternatives to the traditional appraisals available in the market today.” ABA’s letter came in response to a request for feedback on a range of topics including: appraisal modernization; the uniform appraisal dataset and the design of appraisal forms; automated valuation models and appraisal waivers; and valuation differences by borrower and neighborhood ethnic makeup.

“ABA recognizes the need to expand traditional appraisals to include hybrid and desktop valuation approaches in order to have alternative valuation tools for different types of loans,” the association wrote. “The marketplace needs a full array of alternative methods to cover the broad spectrum of mortgage transactions and to address the different risk components or complexities of each transaction.”

As FHFA considers rolling out a new consolidated appraisal form, ABA emphasized that Fannie and Freddie should carefully consider costs and benefits associated with these changes, including the costs to industry arising from the implementation of the modifications to residential forms.