After eight months of public criticism for their original deal, Fannie Mae and Freddie Mac reached a new agreement with New York Attorney General Andrew Cuomo to ensure independent home appraisals.
The government-sponsored enterprises will purchase only loans supported by appraisals "conducted independently and honestly," Mr. Cuomo said in a notice posted last week on his Web site.
Rules announced in March would have prohibited home loan brokers from selecting appraisers. Lenders would have been barred from using in-house staff to perform valuations for any loans Fannie or Freddie purchased. In most cases, lenders also would have been prevented from using appraisal management firms they own or control.
The revised agreement "preserves the core goals of ensuring appraiser independence and eliminating systemic conflicts of interest," Mr. Cuomo said. "It also incorporates commonsense suggestions of industry participants."
