April 19, 2023
AI Letter to FHFA Critical of Value Acceptance Program
The Appraisal Institute on April 13 sent a letter
to Federal Housing Finance Agency Director Sandra Thompson that was critical of Fannie Mae’s value acceptance program. AI expressed its concerns about the program's potential effect on the valuation profession.
Specifically, AI said it was concerned that the value acceptance program is creating an alternative workforce of property data collectors that may negatively affect aspiring appraisers’ ability to enter the valuation profession.
Currently, appraiser trainees are allowed to perform this work, but only under a supervisory appraiser-trainee relationship so that state regulatory officials can track and log it. Any experience earned outside of a supervisory appraiser process would therefore require a change to the Real Property Appraiser Qualifications Criteria and an overhaul of the logging of experience and oversight process. AI stated that, “We believe the current policies around property data collectors are at cross purposes relative to bringing new and diverse appraisers into the profession.” AI is partnering with Fannie Mae and Freddie Mac on the Appraiser Diversity Initiative.
Additionally, AI raised concerns about messaging around value acceptance. When Fannie Mae announced the program, it stated that appraisals will no longer be the “default requirement.” AI explained that increased use of value acceptance combined with hybrid or desktop appraisals could lead “reasonable people [to] conclude that attempts may be made to minimize the scope of services of appraisers. This has profound potential impacts on safety and soundness of the mortgage market, particularly considering the significant market and economic headwinds of the day.”