Sherman Introduces Appraisal Relief Legislation
Washington, D.C. – Congressman Brad Sherman (D-Sherman Oaks), who is also Chair of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, has introduced legislation to temporarily waive certain mortgage underwriting requirements that call for a new in-home appraisal to be completed for a mortgage to be eligible for a federal program or to be guaranteed by Fannie Mae or Freddie Mac. The current coronavirus outbreak makes it imperative that individuals limit their contact with one another as much as possible.
This legislation builds on an announcement made by the Federal Housing Finance Agency (FHFA), providing increased flexibility in Fannie Mae and Freddie Mac appraisal requirements in response to coronavirus. The bill does so by directing the leadership of the Federal Housing Administration (FHA) and FHFA to issue guidance to provide for reasonable alternatives to in-home appraisals.
In addition to reinforcing the steps that FHFA has taken, this legislation ensures that a waiver of in-home appraisal requirements remains in place until the national emergency declared by President Trump on March 13 is formally ended. This bill will also extend that waiver to include the FHA mortgage program, which accounted for nearly 750 thousand mortgage loans made last year, most to first-time homebuyers.
“I am concerned that any federal mortgage underwriting standards which require in-home appraisals may conflict with some individuals’ ability to maintain personal quarantines and practice social distancing,” said Congressman Sherman. “Many mortgage transactions, particularly refinancing, are completed by a competent independent appraiser, who simply views the home from outside and takes exterior pictures for the record. I do not believe this approach should be used for HUD administered mortgage programs except under the most extreme circumstances. However, until this crisis is over, we are in extreme circumstances.”