Fannie: Lenders Heeding Appraisal Warnings

More lenders are paying attention to Fannie Mae's messages about inflated appraisals because the warnings are right about two-thirds of the time, a company official has told a symposium on appraisal fraud.Lenders processing loans through Fannie's Desktop Underwriter receive messages if the appraisal "materially exceeds our value for the property," Fannie director Mark Simpson told the Appraisal Foundation symposium. Fannie's automated valuation model will issue a warning if the value is excessively high based on local market data. DU also issues messages if it catches certain loan characters or patterns associated with inflated appraisals. Through experience and testing, "we find that we are right about two-thirds to three-quarters of the time," Mr. Simpson said. "We are seeing more of our customers paying more attention to this information." Fannie Mae can be found on the Web at http://www.fanniemae.com.