Settlement Yields a Watchdog on Home Appraisals

WASHINGTON -- Fannie Mae and Freddie Mac will establish a new home appraisal watchdog to prevent fraud in valuing homes as part of a settlement with Attorney General Andrew Cuomo of New York, the companies and Cuomo said Monday, according to Reuters.

Starting Jan. 1, 2009, the nation’s two largest sources of mortgage finance will be working under a new oversight body that ensures home appraisals are accurate, Cuomo’s office said, according to Reuters.

Monday’s deal removes the threat of lawsuits from Cuomo, according to Reuters.

In a statement, Fannie Mae said it will provide $12 million over five years to help establish the appraisal oversight body that will operate within the Office of Federal Housing Enterprise Oversight. The main job of the new board will be to make sure that home appraisers remain at arm’s length from mortgage lenders, according to Reuters.

-- NYSSCPA.org News Staff

Posted on 3/3/08