In a significant move towards fairness and transparency in the housing market, the U.S. Department of Housing and Urban Development (HUD) and the government-sponsored enterprises (GSEs) have introduced new reconsideration of value (ROV) guidelines. Announced on May 1, 2024, these updates enable borrowers to request reassessments of their property’s appraised value if they suspect inaccuracies or biases. The new HUD policy (HUD No. 24-096), effective September 2, 2024, and updates from Fannie Mae® (SEL-2024-03, B4-1.3-12) and Freddie Mac® (Bulletin 2024-6), effective August 29, 2024, establish clear frameworks for lenders to handle borrower initiated ROV requests.
The essence of these new guidelines lies in empowering borrowers by providing a mechanism to appeal potentially flawed appraisals. Borrowers are now informed of their right to request an ROV at the time of mortgage application and appraisal presentation, although only one ROV per appraisal is permitted, and requests are not allowed after the loan is closed.
Lenders are required to inform borrowers about their rights, ensure underwriters are trained to address appraisal deficiencies, and handle ROV requests transparently and promptly. Appraisers must adhere to new standards, providing detailed commentary on their conclusions during ROV reviews to maintain accountability and professionalism.
Veros Real Estate Solutions (Veros®) and Valligent commend these initiatives and have taken proactive measures to also eliminate bias in property valuations. Veros’ iVALUATION™ pilot program leverages VeroVALUE™ automated valuation models (AVMs) to streamline the ROV process, while BiasCHECK™ appraisal review helps detect potential biases in appraisals. Additionally, the Valligent appraisal training program aims to diversify the appraiser workforce, promoting long-term inclusivity and equity in property valuations.
These new guidelines from the FHA and GSEs mark a pivotal moment in ensuring fair and transparent home appraisals. Veros and Valligent are dedicated to eliminating biases and ensuring equitable property valuations, contributing to a more inclusive housing market.
If you’d like to learn more, please contact a Veros or Valligent representative at 877-490-0390, or email contactus@valligent.com.
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For more information about HUD and its programs visit www.hud.gov. To learn more about HUD’s property appraisal and valuation equity work click here.
For more information about Fannie Mae and the Selling Guide updates, visit Single-Family Homepage | Fannie Mae.
For more information about Freddie Mac and the Guide Bulletin, visit https://guide.freddiemac.com/app/guide/home
