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The Federal Housing Finance Agency (FHFA) Monday released a request for information (RFI) reviewing its appraisal-related policies, practices, and processes. The agency indicated that it will use the comments to determine the necessary modifications needed to ensure the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, operate in a safe and sound manner.

"Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process," said FHFA Director Mark Calabria. "But if modernization is not properly adopted, it could have negative unintended consequences.

"Today's RFI will improve FHFA's understanding of how the Enterprises can improve the appraisal process while at the same time ensuring they don't take on unintended or inappropriate levels of risk," he added.  

Through the RFI, the FHFA seeks to address a number of issues, including:

• appraisal modernization;
• the Uniform Appraisal Dataset (UAD) and the design of appraisal forms;
• automated Valuation Models (AVMs) and appraisal waivers; and
• valuation differences by borrower and neighborhood ethnic makeup.

Additionally, the FHFA is also seeking input on the extent of disparities in value determinations for racial and ethnic minority borrowers, as well as properties located in neighborhoods with a large proportion of racial and ethnic minority residents.

Comments are due to the agency by February 26, 2021. NAFCU will review the RFI and seek member credit unions' feedback in an upcoming Regulatory Alert. 

As a leader in advocating for housing finance reform that ensures credit unions' unfettered access to the secondary mortgage market and facilitates the flow of liquidity through the market, NAFCU works closely with Calabria and the FHFA and will continue to advocate on behalf of the industry's best interests.