Comp Checks and FHA, where to send

[Damon Pedersen]

Brad,
While your post seems like you maybe care, obviously you don't. If FHA cared at all, this would be your highest priority. Rather it seems you are more concerned with one employee of yours getting bogged down with illegal information. FHA should hire 1,000s of people to deal with this problem instead of tunring their backs.

But, then again, what are government programs for?

Several months ago, I posted a post entitles, FHA Comp Checkers.. Does FHA Care? I had a couple responses from an FHA employee who was going to get us info and never did. Since, I would assume FHA has done tens of thousands of loans.. too bad a majority of those loans were promised values before the appraisals were ordered.

While you may have once been an appraiser, it sounds as if you have been working for the government for too long.

Damon

 

[timd354]

When did I approve this, as Bobbi works for me?
Why are you asking us, its your office....but your comment sure makes it clear that you think that you are the big boss, the big cheese, the big kahuna.
Let me address/clarify a couple of things

1) Please note the correct spelling of "Santa Ana".
That's the way to focus first on the the important issues raised by the post....god knows that mispelling "Santa Ana" could cause HUD to lose millions of dollars.m2:
2) While I don't necessarily disapprove of using Bobbie as a point of contact (POC) for this issue, one can also send such documentation to anyone on my staff - as it ultimately ends up on my desk. Posting her contact information does not concern me, as long as people do not bog her down with questions that could/should be answered by the DE Underwriter, or, could be obtained by attending an FHA training course.
Yes, you would not want to waste time answering questions from the thousands of unqualified appraisers that FHA just placed on the FHA roster without even so much as minimally testing their competence....oh, I forgot that these appraiser's certified that they are competent when they signed up, so we know they must be....we all know that all of the subprime loan officers' (who are now originating the "New Subprime (I mean FHA loans)" favorite skippies would never misrepresent their qualitifications.
3) It is very important to include the appropriate FHA case number with the complaint.
I guess it would be too much to ask the FHA to be able to actually track down a loan that they guaranteed by using the property address... as I sure that you are aware, Mr. Pack, when we refuse to do the comp check, we never are sent the case number.

4) Do not, under any circumstance, send us a recorded conversation (as alluded to in a subsequent post). There are both state and federal laws that prohibit that sort of conduct. The Department neither encourages nor condones any disregard of state or federal law.
This actually makes sense.

Mr. Fookes - I'm happy to read you have developed a good working relationship with Bobbi and hope it continues. I rely on her often. I appreciate your diligence/passion for assisting the SAHOC in minimizing risk to the FHA mortgage insurance programs.
It is a real shame that the FHA adds virtually every appraiser that wants to be added to the FHA roster without even making a minimal effort to ascertain whether or not that appraiser is competent to do FHA related appraisals...but that would actually reduce the risk to the FHA mortgage insurance progrmas before the damage was done.m2:
Regards,

Bradley A. Pack
Chief (Appraiser), Technical Support Branch
U.S. Department of Housing and Urban Development
Santa Ana Homeownership Center

Since I am such a nice guy, Mr. Pack, I will even suggest your most likely repsonse to my comments:

"I don't respond in this forum as a "government official". I respond as an appraiser tired of reading individuals who hide behind an alias in order to ridicule something/someone/some agency they know nothing about."

Oh, I forgot that you already used that response as an excuse not address the legitimate concerns about the complete lack of standards for approval of FHA appraisers raised by myself and others in another thread.....but, who am I, as I obviously know nothing.

Mr. Pack, the fact is that FHA/HUD has lowered its appraisal approval standards at the very same time that its loan volume and its maximum loan limits have been greatly expanded. The FHA has already demonstrated that it cannot be trusted to "mind the store" and protect the interests of the taxpayer, who will ultimately be asked to bailout the FHA's loan guaranty fund. For years the FHA did nothing about Nehemiah type programs, which anyone with the least bit of intelligence could immediately see was a sham transaction that allowed the seller to pay the buyer's downpayment. Additionally, anyone with any sense knew that this would cause a skyrocketing default rate for loans funded under this program. When the FHA finally figured this out last year (only after these types of loans grew to 1/3 of FHA loans) and tried to bar Nehemiah type programs, the FHA screwed up the process so badly, that a federal judge threw out the new regulations and the FHA had to start whole process over (I am glad to see that they are in the process of trying to implement new regulations - hopefully, this time they won't screw it up). In the meantime, the FHA is down on Capitol Hill telling Congress that a subsidy in the amount of $1.4 billion will be required next year to cover the shortfall in the guaranty fund caused by the FHA's utter and rank stupidity.....sadly, that amount is likely to be a drop in the bucket compared to the future bailout that the "new subprime", a/k/a/ FHA, may well require.

Anyone who is intersted in the real story, not the propaganda, take a look at the report which recently aired on NPR:

http://www.npr.org/templates/story/story.php?storyId=92152401

Here is an interesting little chart from the story:

Hmmm....I wonder what the chart including the figures from 2006-2008 would look like.

The chart says everything that anyone needs to know in case they were wondering what kind of a job the FHA is doing to protect the interests of the American taxpayer.....but then again, what do I know?

 

[RSW]

Tim,

I just love charts! It is really hard to dispute facts.

 

[ghrousseau]

Since I am such a nice guy, Mr. Pack, I will even suggest your most likely repsonse to my comments:

"I don't respond in this forum as a "government official". I respond as an appraiser tired of reading individuals who hide behind an alias in order to ridicule something/someone/some agency they know nothing about."

Oh, I forgot that you already used that response as an excuse not address the legitimate concerns about the complete lack of standards for approval of FHA appraisers raised by myself and others in another thread.....but, who am I, as I obviously know nothing.

Mr. Pack, the fact is that FHA/HUD has lowered its appraisal approval standards at the very same time that its loan volume and its maximum loan limits have been greatly expanded. The FHA has already demonstrated that it cannot be trusted to "mind the store" and protect the interests of the taxpayer, who will ultimately be asked to bailout the FHA's loan guaranty fund. For years the FHA did nothing about Nehemiah type programs, which anyone with the least bit of intelligence could immediately see was a sham transaction that allowed the seller to pay the buyer's downpayment. Additionally, anyone with any sense knew that this would cause a skyrocketing default rate for loans funded under this program. When the FHA finally figured this out last year (only after these types of loans grew to 1/3 of FHA loans) and tried to bar Nehemiah type programs, the FHA screwed up the process so badly, that a federal judge threw out the new regulations and the FHA had to start whole process over (I am glad to see that they are in the process of trying to implement new regulations - hopefully, this time they won't screw it up). In the meantime, the FHA is down on Capitol Hill telling Congress that a subsidy in the amount of $1.4 billion will be required next year to cover the shortfall in the guaranty fund caused by the FHA's utter and rank stupidity.....sadly, that amount is likely to be a drop in the bucket compared to the future bailout that the "new subprime", a/k/a/ FHA, may well require.

Anyone who is intersted in the real story, not the propaganda, take a look at the report which recently aired on NPR:

http://www.npr.org/templates/story/story.php?storyId=92152401

Here is an interesting little chart from the story:

Hmmm....I wonder what the chart including the figures from 2006-2008 would look like.

The chart says everything that anyone needs to know in case they were wondering what kind of a job the FHA is doing to protect the interests of the American taxpayer.....but then again, what do I know?

Timothy:

Just to let you know there have been some significant changes on the investor side this week with regard to risk based pricing. The first item is that FHA is changing it's mortgage insurance premiums to borrowers based on LTV and Fico Score. This is effective on all case binders assigned after July 14th. The mortgagee letter is the June 11, 2008 letter. Additionally, the market has now factored in a premium for all loans with down payment assistances programs.


Down Payment Assistance and Credit Score <=679 +0.50 pt
Down Payment Assistance and Credit Score >679 <=719 +0.250 pt
Down Payment Assistance and Credit Score >719 0 pt

These new changes seem to be addressing some of the concerns you and others have expressed regarding the high risk associated with the down payment assistance programs. While It might not be what you are wishing for, it is a definite sign that the market and FHA is aware of the risk, and trying to price accordingly for that risk. Hopefully they will ramp up their auditing and address the appraisal and broker concerns.

 

[Kevin Mc]

Oh, I forgot that you already used that response as an excuse not address the legitimate concerns about the complete lack of standards for approval of FHA appraisers raised by myself and others in another thread.....but, who am I, as I obviously know nothing.

Mr. Pack, the fact is that FHA/HUD has lowered its appraisal approval standards at the very same time that its loan volume and its maximum loan limits have been greatly expanded. The FHA has already demonstrated that it cannot be trusted to "mind the store" and protect the interests of the taxpayer, who will ultimately be asked to bailout the FHA's loan guaranty fund.....but then again, what do I know?

While Mr. Pack has always responded to most concerns on the forum, that does not negate one word you posted Timd. The fact that FHA has attracted the same load of cretins most of us had hoped went away with the demise of the subprime isn't lost on anyone.

 

[Joshua Fookes]

Thanks for the reply Brad.

When did I approve this, as Bobbi works for me?

I didn't say you approved it. I didn't know who you were prior to this post. I'm just relaying information to other appraisers who are fed up with being harassed and pressured from unethical/uneducated mortgage brokers. I called an 800 number off HUD's website and jumped through the hoops long enough to actually find a real live person who understood appraiser speak. It was a great relief when I spoke to Bobbi and she expressed genuine concern that I may have been propositioned by multiple mortgage brokers to violate HUD criteria. I asked her if there was somewhere I could send the requests I have been receiving since the sub-prime meltdown drove all the slimy loan officers to FHA loans.

Let me address/clarify a couple of things.

1) Please note the correct spelling of "Santa Ana".

I went back and forth between "Ana" and "Anna", thanks for clarifying. I wouldn't want the requests to get ignored because they never made it there.

2) While I don't necessarily disapprove of using Bobbie as a point of contact (POC) for this issue, one can also send such documentation to anyone on my staff - as it ultimately ends up on my desk .

GREAT!!! why don't you just give us your contact info and we'll skip the "middle-woman".

Posting her contact information does not concern me, as long as people do not bog her down with questions that could/should be answered by the DE Underwriter, or, could be obtained by attending an FHA training course.

I'm not posting the info so that she gets bogged down on, "how do I appraise a house" questions. My post was pretty clear that it had to do with "comp checks" and where to send them. I'm hoping to see that FHA does care.

I think that because you post here, you DO care. I am thrilled that FHA might take a second look at questionable properties, when evidence is provided that loans may have been fraudulently originated by using "influenced" appraisers.

But, Maybe Pam is right when she says we should send the property information to other agencies as well, to make sure FHA is doing things to show they "care" about getting snowballed by the millions of shark loan officers out there doing FHA loans today.

3) It is very important to include the appropriate FHA case number with the complaint.

Will do, (when/if I have it). BUT, your office should be able to run address/borrower information and get some credible information to prevent the fraud that is on its way. What the other appraisers say is true. Case #'s are not ordered till the slimy guys select their pet appraiser.

Not all LO's are slimy, but I've seen an increase since the sub-prime fiasco, I just want to see it stop before it's too late.

4) Do not, under any circumstance, send us a recorded conversation (as alluded to in a subsequent post). There are both state and federal laws that prohibit that sort of conduct. The Department neither encourages nor condones any disregard of state or federal law.

OK, to clarify, Bobbi said she needed all items to be in writing before she would be able to proceed. She NEVER indicated that I should record conversations.

Mr. Fookes - I'm happy to read you have developed a good working relationship with Bobbi and hope it continues. I rely on her often. I appreciate your diligence/passion for assisting the SAHOC in minimizing risk to the FHA mortgage insurance programs.

Regards,

Bradley A. Pack
Chief (Appraiser), Technical Support Branch
U.S. Department of Housing and Urban Development
Santa Ana Homeownership Center

Thanks for the reply and clarification. If you could provide contact information for other HOCs, I think the other diligent and passionate appraisers would appreciate it.

Josh

Joshua J. Fookes
Certified General Appraiser
#AG030308
Redding, CA

 

[timd354]

Timothy:

Just to let you know there have been some significant changes on the investor side this week with regard to risk based pricing. The first item is that FHA is changing it's mortgage insurance premiums to borrowers based on LTV and Fico Score. This is effective on all case binders assigned after July 14th. The mortgagee letter is the June 11, 2008 letter. Additionally, the market has now factored in a premium for all loans with down payment assistances programs.


Down Payment Assistance and Credit Score <=679 +0.50 pt
Down Payment Assistance and Credit Score >679 <=719 +0.250 pt
Down Payment Assistance and Credit Score >719 0 pt

These new changes seem to be addressing some of the concerns you and others have expressed regarding the high risk associated with the down payment assistance programs. While It might not be what you are wishing for, it is a definite sign that the market and FHA is aware of the risk, and trying to price accordingly for that risk. Hopefully they will ramp up their auditing and address the appraisal and broker concerns.

An additional 1/2 point charge for a loan with downpayment assistance and a credit score less than 679 comes does not even come close to covering the additional risk associated with the loans.......the default rate on these types of loans is over 16%.......a half point surcharge does not even come close to covering the loses from a 16% default rate.

 

[timd354]

While Mr. Pack has always responded to most concerns on the forum, that does not negate one word you posted Timd. The fact that FHA has attracted the same load of cretins most of us had hoped went away with the demise of the subprime isn't lost on anyone.

I applaud much of what Mr. Pack does on this forum regarding answering FHA appraisal questions. However, when one raises legitimate concerns about the FHA not properly vetting appraisers and/or raises other legitimate concerns, Mr. Pack does the public and his agency no service by personally attacking those who bring up these issues. I understand that nobody likes to have their agency/employer criticized, but the fact is that many people, including appraisers and others, are very legitimately concerned with the massive potential liabilities that FHA seems to be taking on. In the end it is us, the taxpayers, who will pay the bill when these liabilities come due.

and the "new subprime" train keeps rolling down the tracks.......

 

[Mr Rex]

Guys named Brad have a hard time here.

 

[RSW]

Guys named Brad have a hard time here.