PEABODY — Some homeowners hoping to refinance to take advantage of low interest rates are encountering an unforeseen obstacle: the appraisal. 

And appraisers say that regulators have been slow to react to concerns from both sides that in-home appraisals are putting both homeowners and the appraisers at risk of contracting or spreading coronavirus. 

"It's a very fluid situation at this point," said Stephen Sousa, vice president of MBREA, a trade group for the real estate appraisal industry. "There is a tremendous amount of uncertainty and confusion."

With many homeowners now also facing financial uncertainty due to shuttered businesses, the money they could save on a lower mortgage payment could be used to offset lost income.

But appraisers say some people are actually pulling out of refinancing agreements rather than allow someone into their home. 

Earlier this week, the Federal Housing Finance Agency issued advisories for Fannie Mae and Freddie Mac that in some circumstances allow appraisals to be conducted remotely, either from a desk or from outside the home. But those circumstances do not, at least at this point, appear to include home refinancings, Sousa said.  

"To allow for homes to be bought, sold, and refinanced as our nation deals with the challenges of the coronavirus," Fannie Mae and Freddie Mac "will leverage appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages," says a press release issued by FHFA on Monday. 

But not all lenders are on board with those alternatives, Sousa said, and there has been no guidance relative to other types of loans, such as VA or FHA loans.

And it is taking time for the word to get out to lenders as well. 

The rules requiring in-home appraisals are intended to prevent fraud, and the FHFA's policy allowing desk or drive-by appraisals is temporary, through May 17.

Sousa and others say concerns about fraud could be addressed down the line. 

On the other end are concerned homeowners. 

"I'd say 80 to 85 percent of our appraisers are not getting inside," said Sousa. "It's a two-way street. The appraisers don't want to go in, either." 

Scott McKeen, who runs an appraisal firm in Middleton, said he's in two high-risk categories. "We have no access to protective materials," he said. At 62, and with a lung ailment, he had to turn down a recent job involving a multi-family home. 

Another appraiser he knows was told by a lender that they wouldn't get any more work unless they were willing to do interior inspections. 

"Fannie Mae and Freddy Mac really dropped the ball," he said, referring to the long delay in taking action. "Let us do drive-by appraisals. To put people who can't procure adequate protection in harm's way is ridiculous." 

Jay Mavrakos of Peabody's Bluerock Appraisals, said he's been using video chats on Facetime, WhatsApp and Skype whenever possible – but so far, only one lender has allowed him to use the chats on a refinance appraisal. In situations where it hasn't been allowed, "people are canceling refis and backing out of agreements," he said. 

Both he and his brother, who is also an appraiser, have also encountered skittish homeowners over the last several weeks. 

Mavrakos will stand outside and start a session with the homeowner, then instruct them where to move their phone room by room, floor by floor. He can take notes as he watches, and ask questions or ask homeowners to zoom in on things like the heating system. 

"It's actually been more informative," said Mavrakos, who is hopeful that more lenders will begin letting him use the method to do appraisals in the weeks ahead. 

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis. 

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