Appraisal FirewallX Update
for Reconsideration of Value (ROV)

Building ROV Disclosures and Processes


On May 1, 2024, HUD and the GSEs announced a new borrower-initiated Reconsideration of Value (ROV) process to go into effect August 29, 2024, (GSEs) and September 2, 2024 (HUD). For the full announcement, please refer to HUD’s May 2024 Mortgagee Letter. The GSEs’ Selling Guide Announcements can be accessed here for Fannie Mae and Freddie Mac. This upcoming change was a collaborative effort between HUD, FHFA, Fannie Mae, and Freddie Mac to promote fairness and transparency during the appraisal analysis performed by an appraiser. Through this updated process, borrowers will gain the ability to appeal the appraised value if they feel the value is unsupported by the appraisal data returned or if any bias/discriminatory practices may be present within the appraisal report itself. 

COMING SOON: Appraisal FirewallX will be holding another upcoming webinar to unveil the features we have implemented for the ROV process for lenders and borrowers alike. Keep watch for an invitation in the coming weeks for you and your clients! 


Appraisal FirewallX is Fully Equipped for the ROV Requirement 

Your lenders’ policies and procedures must include steps for the borrowers to appeal an appraisal when they believe the opinion of value is unsupported, potentially biased, or deficient due to unacceptable appraisal practices. Both HUD and the GSEs have aligned their requirements for a lender to supply an ROV disclosure to the borrower(s) at the time of loan application and upon delivery of the appraisal report.

As your trusted Appraisal Technology Partner, we want to make sure you and your clients are well-informed when these guideline updates become available. Our goal is to ensure all parties are given the proper tools to easily comply with these impending changes. Within Appraisal FirewallX, you and your lenders will be given the ability to upload your own ROV Disclosure document to the division settings, which can then be manually or automatically delivered to your clients' borrower(s) with the electronic delivery of the appraisal.

It is not required to pass the borrower's initiated ROV on to the appraiser, but it is the lender’s responsibility to properly inform the borrower of their rights to request an ROV, ensure the appraisal and opinion of value are reliable and supported, and ensure that the borrower’s concerns with the valuation are addressed in a timely manner. Appraisal FirewallX features options to forward the borrower’s initiated ROV to the appraiser/AMC, and if necessary, utilizing the Dispute/ROV feature currently available today. 


Considerations for Building ROV Disclosure Letters 

Suggested verbiage examples to consider in your lenders' borrower ROV Disclosure letter, if the disclosure has not already been finalized, are as follows: 

  • Explanation of what a Reconsideration of Value request is.  
    • Example: “You have the right as the borrower to request a Reconsideration of Value (ROV), which refers to the review and reconsideration of the appraised value of a property. Prior to loan closing, you have the right to appeal the initial appraisal if you believe it is inaccurate or biased.” 

  • Only one ROV is permitted prior to loan closing (See suggested text above). 

  • Requirements are placed on the borrower to explain why they have initiated the ROV and explain how that data supports their claim. 

  • Clear explanation of the borrower’s process to request an ROV. 
    • Lenders can decide to have their process be that the borrower sends an email to their Loan Officer. 
    • OR
    • Explain the process that will be presented to each borrower if you choose to electronically send a copy of the appraisal to the borrower within Appraisal FirewallX. In which case, the process will be to follow the ROV Disclosure link within the Property Documents email notification they receive with a copy of their appraisal.  

                       

Borrowers will be brought to a page to review their lender’s disclosure and submit comparables (subject property addresses) they believe support their request for a reconsideration of value, and/or provide reasoning and details regarding their ROV request. This ROV request will be automatically sent to your client's lending team for review.

The updated requirements from all parties include mentioning that prior to the submission of the borrower’s ROV request to the appraiser, the lender has completed their appraisal review first. If you or your clients are not currently utilizing our Manual Review or Appraisal ScorecardX features, this may be a good opportunity to reach out to Danielle Walker for a demo or setup to ensure compliance.