Real Estate Term of the Day: Drive-by Appraisal
DRIVE-BY APPRAISAL (aka: Limited Appraisal) – value estimated prepared without the benefit of an interior inspection (Barron’s Dictionary of Real Estate Terms)
Due to the changes in the mortgage underwriting rules over the past couple of years and the creation of the HVCC, the practice of drive by appraisals are less relevant due to the lack of interior value adjustments. A complete appraisal is the most comprehensive analysis to arrive at the final appraised value.
According to Fannie Mae, to help enhance the integrity of the home appraisal process in the mortgage finance industry, in March 2008, Fannie Mae entered into an agreement with our regulator – the Federal Housing Finance Agency (FHFA) (then the Office of Federal Housing Enterprise Oversight) – and the New York Attorney General’s office to adopt certain policies relating to appraisals for loans delivered to us. Following a public comment period, the Home Valuation Code of Conduct (Code) was modified and became effective for single-family mortgage loans (except government-insured loans) originated on or after May 1, 2009, and delivered to Fannie Mae.