5601.13: Obtaining subsequent appraisal reports and reconciling multiple opinions of market value (03/22/17)

(a) Reviewing appraisal reports

The Seller is required to evaluate an appraisal to determine whether or not the appraisal report meets the requirements of this chapter and the Seller's other Purchase Documents and that the opinion of market value is accurate and adequately supported.Before rejecting an appraisal, the Seller should request the appraiser to provide additional information and/or address any deficiencies with the appraisal report. If the appraiser does not adequately address the Seller's concerns and the Seller is unable to conclude that the appraisal report meets Freddie Mac requirements, then the appraisal must be rejected and a new appraisal must be obtained.

(b) Obtaining subsequent appraisal reports, appraisal desk review reports and appraisal field review reports Exhibit 35, Appraiser Independence Requirements, ("Appraiser Independence Requirements") permits the Seller to obtain a second or subsequent appraisal if:

There is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the Mortgage file
The appraisal is obtained pursuant to written, pre-established bona fide pre- or post-funding appraisal review or quality control processes or underwriting guidelines as long as the Seller adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value; or
It is required by law

(c) Reconciling multiple opinions of market valueIf the initial appraisal report was not rejected and a second or subsequent appraisal report, appraisal desk review report or an appraisal field review report is obtained in compliance with the requirements of this chapter, the Seller's other Purchase Documents and the Appraiser Independence Requirements, the Seller must determine which of the opinions of market value is the most accurate.The Seller must comply with the Appraiser Independence Requirements and adhere to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value. The Seller's appraisal review and reconciliation process must result in the Seller relying on the most accurate and supported opinion of market value.A copy of all valuation documents used in the analysis as well as written documentation justifying the decision as to which appraisal (or appraisal field review) report was used to underwrite the Mortgage must be retained in the Mortgage file.The value used to underwrite the Mortgage is the basis for the Seller's value warranty and is the value that must be delivered to Freddie Mac.