Cape Coral Florida's Real Estate Guide

Fannie Mae to prohibit 'appraisal cutting'

 WASHINGTON - Aug. 27, 2010 - Fannie Mae is banning a common practice known as "appraisal cutting," starting next week.

When lenders selling loans to the firm challenge a valuation, the underwriter will have to contact the appraiser directly. If the lender is unable to settle the dispute, its only option will be to order a second appraisal.

Lenders will be unable to simply cut the value of the appraisal or shop around for the best appraisal.

Source: American Banker, Kate Berry and Marc Hochstein (08/26/10)

© Copyright 2010 Information Inc.