GSEs to Field Gripes on HVCC

The Federal Housing Finance Agency said Thursday that Fannie Mae and Freddie Mac are preparing to field complaints from appraisers, consumers and others about violations of the Home Valuation Code of Conduct. If, for example, a lender pressures an appraiser to overvalue a home so a loan can get done, the appraiser will be able to report the lender to one of the GSEs, which may refer the case to regulators. Originally that job was going to belong to an "independent valuation protection institute" that the GSEs would seed with a combined $24 million. But since the March 2008 agreement with New York attorney general Andrew Cuomo that established the code, the government has seized Fannie and Freddie and sunk $145 billion of taxpayer money into them. It has become untenable for the GSEs to bankroll an independent institute. "I cannot, as conservator, justify the enterprises funding the institute," said Edward DeMarco, the acting director of the FHFA in a letter to Cuomo. In the next few weeks the GSEs will create a process for people to submit complaints online.