New Reconsideration of Value (ROV) Regulations: Key Updates for Homeowners and Realtors

In today’s real estate market, the accuracy of a home’s appraisal can make or break a deal. Appraisal values are critical for securing financing and closing sales, but what happens when the appraisal doesn’t seem to match the property’s true worth? Fortunately, recent changes to the Reconsideration of Value (ROV) process provide homeowners and realtors with a clearer, more structured way to challenge appraisals they believe to be inaccurate.

What is a Reconsideration of Value (ROV)?

An ROV is a formal process that allows borrowers or lenders to request a review of a property’s appraisal when they believe the appraised value does not reflect the actual market conditions or property features. This process can help correct errors, update outdated information, or ensure that comparable sales were appropriately considered.

Key Changes in the New ROV Regulations

In 2024, new regulations were introduced to make the ROV process more transparent and accessible for both homeowners and realtors. These updates clarify the steps that borrowers must follow and provide more structure for how lenders and appraisers handle reconsideration requests.

1. Requests Must Come from the Borrower The most important change is that the request for an ROV must be initiated by the borrower. This ensures that the homeowner has direct control over the process, and it encourages borrowers to provide the necessary supporting documentation, such as comparable sales data, market trends, or evidence of errors in the appraisal report.
2. Clear, Standardized Guidelines Lenders are now required to give borrowers a simple, easy-to-understand form that outlines the ROV process. This includes details about what type of documentation the borrower needs to submit, such as additional comps or corrections to factual errors in the appraisal. Borrowers are allowed one ROV request per appraisal, so it’s important to compile all necessary information before submitting.
3. Timely Communication and Documentation The new regulations set clear expectations for lenders and appraisers regarding communication timelines. Lenders must acknowledge receipt of the ROV request and provide updates on the status of the reconsideration. Additionally, all communication and documentation related to the ROV request must be retained by the lender, ensuring transparency and accountability throughout the process.
4. Supporting Documentation For an ROV to be considered, borrowers must submit supporting data, which could include:
   • Comparable recent home sales that may have been missed in the initial appraisal.
   • Evidence of factual errors, such as incorrect square footage or misidentified property features.
   • Market data that reflects changes in the area’s housing market since the initial appraisal.
5. What Happens Next? Once the borrower submits an ROV request, the lender reviews the documentation and communicates with the appraiser. The appraiser may revise the valuation if new evidence supports a different value, or they may stand by the original appraisal if no changes are warranted. The borrower will then be informed of the final decision.

Why These Changes Matter for Homeowners and Realtors

For homeowners, these new regulations offer peace of mind by giving them more control over the appraisal process. If an appraisal comes in too low and threatens to derail a sale or refinance, the borrower now has a clear pathway to challenge that valuation and present new evidence.

For realtors, understanding the ROV process can be a powerful tool when working with clients who face challenges with appraisals. You can help clients gather the necessary data, ensuring that the request is well-documented and improving the chances of a successful reconsideration.

By staying informed about these changes, realtors and homeowners can navigate the appraisal process more confidently and ensure that home valuations accurately reflect market conditions and property features. At Authority Appraisals, we are committed to helping our clients understand and use the ROV process to their advantage. For more information on how these changes might affect your next transaction, don’t hesitate to contact us.

For more detailed information on the new ROV regulations, check out the full update from Fannie Mae.