In 2018 Fannie Mae reported that 5% of financing would use an appraisal waiver. In 2021 this reached 50%. So, is Fannie Mae run by people who miscalculated by 1000%, or, were they lying. I called them out on the known lie in 2018 at the Appraisal Expo in Las Vegas, and they played dumb. How does the industry hold this bad faith activity accountable?
Transparency and Reporting: Advocates, industry stakeholders, and policymakers can call for greater transparency from Fannie Mae regarding its appraisal waiver policies. Fannie Mae should be required to provide detailed reports and data on the use and impact of appraisal waivers, including their effects on property valuations, lending practices, and potential risks to the housing market.
Congressional Oversight: Congress can exercise its oversight authority by holding hearings to examine the rapid increase in appraisal waivers and their consequences. Lawmakers can question Fannie Mae officials about their decision-making process, the impact on consumers, and whether these policies align with the organization's mission of supporting the housing market.
Regulatory Scrutiny: Regulatory bodies like the Federal Housing Finance Agency (FHFA) oversee Fannie Mae's activities. Advocates can urge the FHFA to investigate the use of appraisal waivers and assess whether they comply with safety and soundness standards, consumer protection regulations, and the overall stability of the housing market.
Stakeholder Engagement: Organizations representing appraisers, real estate professionals, consumer advocates, and other industry stakeholders can actively engage with Fannie Mae to express their concerns, propose alternative solutions, and advocate for policies that prioritize accurate property valuations and consumer protection.
Legislation and Policy Reforms: Policymakers can introduce legislation or push for regulatory reforms to address the excessive use of appraisal waivers. These reforms may include setting limits on the percentage of loans that can use appraisal waivers, enhancing appraisal quality standards, or requiring independent third-party reviews of waivers.
Public Awareness Campaigns: Consumer advocacy groups can raise public awareness about the potential risks associated with widespread use of appraisal waivers. Educating homebuyers about the importance of accurate property valuations and the potential consequences of waived appraisals can help create pressure for change.
Collaboration with Other Government Entities: Collaboration between federal, state, and local government entities can lead to a unified approach to addressing concerns related to appraisal waivers. State regulators, in particular, can play a role in ensuring that appraisal practices meet local market needs and consumer protection standards.
It's important to note that Fannie Mae operates within a regulatory framework and is subject to oversight by government entities. Holding Fannie Mae accountable for its appraisal waiver policies requires a coordinated effort involving advocacy, transparency, regulatory action, and legislative reforms to ensure that appraisal practices align with the best interests of consumers and the overall housing market stability.