Appraisal Institute Refutes NAR Comment On ‘Stalled Transactions’

praisal Institute has responded to [link=http://www.mortgageorb.com/e107_plugins/content/content_lt.php?content.3745][u]comments[/u][/link] made earlier this week by Lawrence Yun, chief economist for the National Association of Realtors, in which Yun said homes sale transactions in May were delayed by faulty valuations. Although home sales increased in May, the number was lower than NAR had expected, given pending-sale levels. ‘There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected," Yun said. "We take offense with the notion that the appraisal is only good if it happens to come in at the sales price," comments Bill Garber, the institute's director of government and external affairs. "That mentality helped cause the mortgage meltdown to begin with. The fact that the appraisal does not match the sales price is not the fault of the appraisal but a fault of the market today." Since the Home Valuation Code of Conduct (HVCC) code took effect May 1, real estate agents and mortgage brokers say a number of appraisals are coming in surprisingly low. NAR is pressing regulators to put an 18-month hold on the code, arguing in a June 22 letter to regulators that it is ‘hampering the housing market's recovery.’ The new rules are not ideal, Gerber agrees. But appraisers are not to blame for a market where prices are falling rapidly, as they ‘only report what's going on in the market,’ he says. "Appraisers reflect the market, and sometimes, the markets don't act like we want them to or hope they will," Gerber adds. "Nonetheless, competent and professional appraisers understand this and develop credible estimates of value that ultimately ensure that lenders loan the proper amount, buyers don't pay too much and sellers get a fair price." SOURCE: Appraisal In