Borrower-initiated Reconsideration of Value (ROV) FAQs
On May 1, 2024, Freddie Mac in collaboration with Fannie Mae and HUD, published requirements related to a borrower-initiated reconsideration of value (ROV) that promote consistency when a perceived appraisal issue and/or appraisal deficiency exists. These requirements also recognize the importance of the borrower having the knowledge and opportunity to request an ROV.
These frequently asked questions (FAQs) provide additional information about the borrower-initiated ROV requirements. Sellers should refer to Single-Family Seller/Servicer Guide (Guide) Section 5604.4 for the comprehensive policy requirements
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Why did Freddie Mac implement these requirements?
Historically, Sellers have maintained their own ROV policies and procedures; Freddie Mac is implementing ROV requirements to promote consistency throughout the borrower-initiated ROV process.
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Will standardized order or disclosure forms be provided by Freddie Mac to Sellers?
No, Sellers are responsible for creating and providing forms that include the information required by the Guide Section 5604.4.
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What does the requirement to provide a disclosure “at the time of application” mean?
The disclosure should be provided at the same time as disclosures required under the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rules.
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How will Freddie Mac evaluate compliance with the ROV requirements?
Compliance with these requirements will be part of the Seller’s operational review.
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What if the borrower-initiated ROV request submitted to the Seller does not meet the minimum Freddie Mac requirements?
If the borrower-initiated ROV does not meet the minimum Freddie Mac requirements, the Seller should work with their borrower(s) to obtain missing information and ensure the ROV request meets Freddie Mac requirements before sending the request to the appraiser.
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Can the borrower initiate more than one ROV?
The borrower may request a maximum of one ROV for each appraisal report.
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Will a borrower-initiated ROV replace a Seller’s ability to request an ROV?
No, Freddie Mac’s borrower-initiated ROV requirements do not replace the Seller’s underwriting practices, which may provide for an ROV to be requested by someone other than the borrower.
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Can the borrower cancel an ROV request?
Yes, the borrower may cancel a borrower-initiated ROV request. The Seller should communicate the cancellation process to the borrower.
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Once the ROV conclusion is made and there is no value change, may the borrower request a new appraisal?
No, the decision whether to accept the appraiser’s conclusions is the responsibility of the Seller.
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As part of a borrower–initiated ROV, if the borrower identifies a minor error in the appraisal report and the appraiser determines the error does not impact the value of the property, is the appraiser required to update the appraisal report?
Yes, for each borrower-initiated ROV, the appraiser must update the appraisal report to correct any errors and provide comments on the change(s).
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What if the borrower-initiated ROV identifies material deficiencies in the appraisal report?
The Seller must work with the appraiser to have all material deficiencies corrected.
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Must a borrower-initiated ROV adhere to Appraiser Independence Requirements (AIR)?
Yes, all appraisals and ROVs submitted to Freddie Mac must comply with AIR.
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How do these requirements apply to third party-originated mortgages?
For each mortgage sold to Freddie Mac, the Seller is responsible for ensuring compliance with the borrower-initiated ROV requirements, even if the Seller did not originate the mortgage.