Among numerous investigations and lawsuits, the home finance industry has agreed to a government approved code of conduct for appraisals beginning May 1. Appraisal management companies will be the middlemen in the new agreement. No longer will lenders be able to “hand pick” appraisers nor will they be able to have direct contact with an appraiser regarding the value of a property being appraised. The appraisal management company will take the orders and make the appraisal assignments.

The director of the Federal Housing Finance Agency, James B. Lockhart, which oversees Fannie and Freddie reports that if AMC’s are applying undue pressure it would be a violation of Fannie and Freddie rules and they would take appropriate action. Lockhart says Fannie and Freddie can force lenders to buy back loans tainted by inflated appraisals.