Question: What is Reconsideration of Value and the Updated Implementation Date

Answer:

According to Fannie Mae:

Fannie developed a framework for lenders to review and respond to a borrower-initiated reconsideration of value (ROV). The lender’s

policies and procedures must include steps for the borrower(s) to appeal an appraisal when they believe the opinion of value

a) is unsupported,

b) is deficient due to unacceptable appraisal practices, or

c) reflects prohibited discriminatory practices.

Regardless of the outcome of the ROV, the lender is responsible for ensuring the appraisal report and opinion of value are reliable,

adequately supported, and that the borrower’s concerns with the valuation are addressed in a timely manner.

 

Fannie’s updated policy includes specific instructions for the borrower disclosure that must be provided at the time of loan

application and again upon delivery of the appraisal report as well as lender requirements for reviewing and responding to both

the borrower(s) and appraiser. Fannie will continue to explore options that would allow the tracking of ROV activity going forward.

 

In May 2024, we issued Selling Guide Announcement SEL-2024-03 related to the development of a framework for lenders to review and respond to a borrower-initiated reconsideration of value (ROV). While lenders are encouraged to implement the ROV policy immediately, they must do so for loans with applications dated on or after the new effective date of October 31, 2024.