NAMB Mulls Challenge to Appraisal Settlement

The National Association of Mortgage Brokers is considering legal action to stop implementation of appraisal standards by Fannie Mae and Freddie Mac that would take the selection of appraisers out of the hands of brokers. The new appraisal standards the mortgage giants worked out as part of a settlement with New York Attorney General Andrew Cuomo amount to "de facto regulatory action" that avoids the proper regulatory process, NAMB executive vice president Roy DeLoach said. It will "create a severe disadvantage to small-business mortgage brokers, and prevent them from engaging competitively in the mortgage marketplace," Mr. DeLoach said. Under the settlement, Fannie and Freddie can't purchase mortgages if the broker selected the appraiser. Wholesalers will have to pick the appraisers, which gives the lender more control of the transaction and makes it difficult for brokers to sell the loan to another investor.