Promoting Transparency in Mortgage Lending with ROV

Promoting Transparency in Mortgage Lending with Reconsideration of Value (ROV)

Driven by collaborative efforts between the GSEs, the Reconsideration of Value (ROV) process is undergoing crucial updates and regulatory changes (Fannie Mae). These regulations establish specific responsibilities for borrowers, lenders, and appraisers, encouraging a more collaborative environment. 

Empowering the Borrowers:

Borrowers are empowered to challenge appraisals they believe are inaccurate (HUD). Here’s how they can initiate the ROV process: 

  • Education: Acquaint yourself with the ROV process within the loan application and appraisal stages. 
  • Disclosure: If you believe the appraisal is inaccurate, communicate the specific concerns to your lender. 
  • Supporting Documentation: Prepare relevant documentation to support your claim, such as comparable property listings or recent renovations not reflected in the appraisal. 
  • Clear Communication: Clearly outline the areas you believe are inaccurate and explain why you believe the revised value is justified. 

Streamlining Lender Operations:

Lenders gain a standardized framework to manage ROV requests, improving efficiency: 

  • Operationalization: Establish clear internal ROV policies and procedures that adhere to Appraiser Independence Requirements (AIR).  
  • Validation and Management: Validate borrower requests for legitimacy and ensure they comply with AIR. 
  • Managing Expectations: Set clear expectations for both borrowers and appraisers.  
  • Documentation Retention: Maintain a comprehensive record of all ROV-related communication and documentation within the loan file (Freddie Mac). 

Maintaining Appraiser Independence:

Appraisers remain central to the process, and their independence is paramount: 

  • Unbiased Response: Respond to standardized ROV requests from lenders in a professional and unbiased manner, addressing the borrower’s concerns within the revised appraisal report. 
  • Reporting Deficiencies: If, during the appraisal process, you encounter unresolved material deficiencies or evidence of unacceptable appraisal practices, report them to the appropriate licensing agency. 
  • Upholding Fair Lending: Uphold your ethical obligation to provide unbiased valuations. Report suspected violations of anti-discrimination laws to the relevant authorities. 

A Collaborative Approach:

These regulations aim to foster a collaborative environment within the mortgage lending industry. Borrowers gain a voice, lenders benefit from operational efficiency, and appraisers maintain their critical role in delivering impartial valuations.  

ValueLink Software is here to support all parties involved with the ROV implementation offering a comprehensive suite of GSE-compliant tools and resources that aim to empower all key stakeholders along the valuation process.  

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