WASHINGTON (12/31/08)--The Credit Union National Association (CUNA) said Tuesday that a new agreement reached by the country’s two largest mortgage finance companies and the New York Attorney General on independent home appraisals promises to be much less burdensome to lenders. Fannie Mae and Freddie Mac reached an agreement last week with Andrew Cuomo intended to ensure the independence of home appraisals. CUNA had urged revisions to an earlier agreement arguing that there could have been significant burdens on credit unions and other small lenders associated with parts of the new Home Valuation Code of Conduct. One of the significant provisions of the original agreement would have required lenders to maintain a telephone and email hotline to address consumers’ appraisal complaints. This, CUNA warned, would have imposed significant new burdens on credit unions, the cost of which would have to be borne by credit union members. CUNA noted that consequence was particularly unfortunate in the current credit climate of higher costs for mortgage credit. Also, the original version would have required those involved in the appraisal process to be completely independent from the loan production staff, a provision with which CUNA also took issue. The new agreement will allow lenders to implement safeguards if it cannot guarantee this independence. The new agreement also dropped a requirement that would have prohibited the use of "in house" appraisals or appraisals prepared by affiliates, which was another improvement sought by CUNA. CUNA Senior Assistant General Counsel Jeffrey Bloch said CUNA’s analysis shows a much-improved agreement that better balances the need for appraisal independence with fewer burdens on credit unions and other lending institutions. He noted that the effective date for the final agreement has been moved back to May 1, instead of Jan. 1 as indicated in the original agreement.