WASHINGTON, March 3 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM)has agreed with the Attorney General of the State of New York and theOffice of Federal Housing Enterprise Oversight (OFHEO) to assist theregulators in their efforts to enhance home appraisal practices on behalfof consumers. The New York Attorney General's office also announced it hasterminated its inquiry of Fannie Mae, which began in November 2007 as partof the Attorney General's complaint against First American Corporationregarding that company's appraisal practices. "We are pleased to work with regulators to do our part to ensure sound,accurate, independent and reliable appraisals," Fannie Mae General CounselBeth Wilkinson said. "As the nation's leading purchaser of mortgage loansin the secondary market, Fannie Mae shares the interests of consumers inthe integrity of the home valuation process, which is an important part ofa well functioning market." Under the agreement, Fannie Mae will take two steps to assist theregulators in their efforts to enhance the quality and independence of theappraisal process. First, to help ensure appraisal independence and valuation protection,Fannie Mae will adopt a Home Valuation Protection Code. The Codeestablishes requirements governing appraisal selection, solicitation,compensation, conflicts of interest and corporate independence, among otherrequirements. Fannie Mae will adopt the Code immediately, and makeappropriate changes to its Sellers Guide to reflect the Code. BeginningJanuary 1, 2009, Fannie Mae will require that lenders represent and warrantthat appraisals prepared in connection with mortgage loans originated on orafter that date that are delivered to Fannie Mae conform to the Code. Second, Fannie Mae will provide $12 million over five years to helpestablish an Independent Valuation Protection Institute. The Institute willmonitor and study the area of home valuations. The Institute will establisha hotline for consumers to contact if they believe the appraisal processhas been tainted or if they believe they have been harmed by appraisalfraud. Appraisers also will be able to contact the Institute if theybelieve their independence has been threatened in any way. A copy of the agreement and the Home Valuation Protection Code can beaccessed at http://www.fanniemae.com/media/pdf/030308_agreement.pdf. While the Office of the New York Attorney General has indicated it hasconcluded its inquiry with respect to Fannie Mae, the company will continueto work with the New York Attorney General and OFHEO on appraisalpractices. "Our lender guide has always stated that lenders must buy back theloans that do not meet our standards and requirements, and the new Codereinforces our standards," General Counsel Wilkinson said. "We willcontinue to work with the New York State Attorney General and otherregulators to support the highest lending standards for the market andhomebuyers." Fannie Mae is a shareholder-owned company with a public mission. Weexist to expand affordable housing and bring global capital to localcommunities in order to serve the U.S. housing market. Fannie Mae has afederal charter and operates in America's secondary mortgage market toensure that mortgage bankers and other lenders have enough funds to lend tohome buyers at low rates. In 2008, we mark our 70th year of service toAmerica's housing market. Our job is to help to those who house America.
