There’s at lot of misinformation out there about the requirements of the Home Valuation Code of Conduct. The problem was bad enough that the good folks at NAR put some pressure on Fannie and Freddie to get them to set the record straight.

It worked. After NAR president Charles McMillan met with the New York Attorney General’s office, the Federal Housing Finance Agency, and Fannie Mae, a new bit of “guidance” came out for lenders.

“Some key items that the public should know,” it reads, and begins with perhaps the biggest issue:

Communications with appraisers – Contrary to some suggestions, the Code provides for communications with appraisers about errors, additional needed information and unprofessional conduct. Quality control personnel may communicate with appraisers and other lender personnel, outside of the loan origination function. The real bar is on communications that seek to influence the appraiser to adopt a set valuation, which is prohibited.

It also addresses some other myths and misconceptions:

Contrary to some suggestion, the Code does not favor the use of AMCs over independent or in-house appraisers.

and

The use of unqualified in-state or out-of-state appraisers, unfamiliar with local conditions, should be reported to state appraiser licensing agencies.

(Some of the others are less about correcting misinterpretations than about, well, wishful thinking. The HVCC, it says, isn’t responsible for longer turnaround times for appraisals, for example.)

Both companies have also updated the HVCC FAQs on their respective Web sites. Fannie’s is here, while Freddie’s is here.

If nothing else, the fact that Fannie and Freddie realized the need to clarify the HVCC is a heck of a victory. Kudos to McMillan and NAR for fighting the fight in Washington.