Appraisal Institute suspended from The Appraisal Foundation

[moh malekpour]

No, FHA and VA are not FRT. Read the line above the bold one in Ken's post #43. It is extremely rare for a residential mortgage to be a FRT.

Yes, FHA and VA are FRT according to below link, my bold. Actually FHA and VA are more federally related than GSEs. If they are not federally related transaction, what are they?
My other question was what would happen to Title XI FIERREA if GSEs are privatized with no more government sponsorship as they might within next year or so. My hint is that if it happened, they might keep FIERREA for FHA and VA or change it to cover the private secondary market or whatever that is going to be there

In addition, Title XI specifically requires appraisals by licensed or certified appraisers for financial transactions for the Federal National Mortgage Association (Fannie Mae); the Federal Home Loan Mortgage Corporation (Freddie Mac); or the Resolution Trust Corporation (RTC), the agency created by the Congress to liquidate the assets of the nation's failed savings and loan institutions. Although not specifically mentioned in Title XI, loans insured by the Federal Housing Administration (FHA) and loans guaranteed by the Veterans Administration (VA) are also considered federally related financial transactions.

http://www.grec.state.ga.us/articles/federaltransaction.html

 

[Calvin the Airedale]

http://www.FDIC.gov/regulations/laws/rules/6000-1700.html​

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6000 - Bank Holding Company Act


Subpart G—Appraisal Standards for Federally Related Transactions

§ 225.63 Appraisals required; transactions requiring a state certified or licensed appraiser.
(a) Appraisals required. An appraisal performed by a state certified or licensed appraiser is required for all real estate-related financial transactions except those in which:
(1) The transaction value is $250,000 or less;
(2) A lien on real estate has been taken as collateral in an abundance of caution;
(3) The transaction is not secured by real estate;
(4) A lien on real estate has been taken for purposes other than the real estate's value;
(5) The transaction is a business loan that:
(i) Has a transaction value of $1 million or less; and
(ii) Is not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment;
(6) A lease of real estate is entered into, unless the lease is the economic equivalent of a purchase or sale of the leased real estate;
(7) The transaction involves an existing extension of credit at the lending institution, provided that:
(i) There has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the institution's real estate collateral protection after the transaction, even with the advancement of new monies; or
(ii) There is no advancement of new monies, other than funds necessary to cover reasonable closing costs;
(8) The transaction involves the purchase, sale, investment in, exchange of, or extension of credit secured by, a loan or interest in a loan, pooled loans, or interests in real property, including mortgaged-backed securities, and each loan or interest in a loan, pooled <A name=fdic611022>loan, or real property interest met Board regulatory requirements for appraisals at the time of origination;
(9) The transaction is wholly or partially insured or guaranteed by a United States government agency or United States government sponsored agency;
(10) The transaction either:
(i) Qualifies for sale to a United States government agency or United States government sponsored agency; or
(ii) Involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate;
(11) The regulated institution is acting in a fiduciary capacity and is not required to obtain an appraisal under other law;
(12) The transaction involves underwriting or dealing in mortgage-backed securities; or
(13) The Board determines that the services of an appraiser are not necessary in order to protect Federal financial and public policy interests in real estate-related financial transactions or to protect the safety and soundness of the institution.

Ken this is somewhat of a catch 22. It is saying that appraisals performed by a state licensed or certified appraiser are required for all transactions except: (ii) Involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate;.

Clearly it contemplates that GSE guidelines for appraisals are tougher than CFR regs and this regulation is willing to allow the bank to lend by those standards. However, the subject of this reg is when a licensed or certified appraiser must be used. Do the GSE allow the use of unlicensed or non-certified appraisers? No. And this particular reg does not release the bank of its other CFR obligations regarding appraisals of which there are many more than just when and when not a licensed or certified appaiser must be employed.

PS. In 1990 I was chief appraiser for the one of the largest thrifts in Ohio taken over by the RTC. For two years I had the CFR regs tattooed to the back of my eyeballs.

 

[Workbox]

This is like watching mom and dad fighting. It's terrible that they are doing this to their kids.

FTR... I'd rather have AI coursework on my resume than TAF coursework.

For what its worth, maybe this is a different AI from the past AI shills that sold us out. Sometimes Ken B gives me hope.

 

[Couch Potato]

Yes, FHA and VA are FRT according to below link, my bold. Actually FHA and VA are more federally related than GSEs. If they are not federally related transaction, what are they?
My other question was what would happen to Title XI FIERREA if GSEs are privatized with no more government sponsorship as they might within next year or so. My hint is that if it happened, they might keep FIERREA for FHA and VA or change it to cover the private secondary market or whatever that is going to be there

http://www.grec.state.ga.us/articles/federaltransaction.html

Not according to federal law. States can't set federal laws or regulations. As CTA noted, it is a bit of a catch 22 situation. It is the regulations for FRTs that says they are not FRTs.

 

[moh malekpour]

Not according to federal law. States can't set federal laws or regulations. As CTA noted, it is a bit of a catch 22 situation. It is the regulations for FRTs that says they are not FRTs.

Where in the federal law says that FHA and VA loans are not federally related transactions? It just doesn't make sense to say that they are not federally related transaction while FHA is insured by Federal Government and VA is guaranteed. You referred to post #43 but I think you have misread the post. The post says appraisal is required for all real estate related financial transactions EXCEPT those 13 items below the line. Go to FDIC page and read the entire page and let me know what is your perception or you have any link to government site that says FHA and VA loans are not Federally Transactions, please point them to me.

http://www.FDIC.gov/regulations/laws/rules/6000-1700.html

This is the definition of Federally related transaction according to FDIC

(f) Federally related transaction means any real estate-related financial transaction entered into on or after August 9, 1990, that:
(1) The Board or any regulated institution engages in or contracts for; and
(2) Requires the services of an appraiser.

and this is the definition of Real estate-related Financial Transaction

(i) Real estate-related financial transaction means any transaction involving:
(1) The sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof; or
(2) The refinancing of real property or interests in real property; or
(3) The use of real property or interests in property as security for a loan or investment, including mortgage-backed securities

 

[Ken B]

There are definitions for "federally-related transactions", "federally-related mortgage", and "real estate-related financial transaction." Those definitions are not synonymous.

 

[George Hatch]

FIRREA applies to the lenders that are under the jurisdiction of the federal banking regulators, i.e., FDIC, NCUA, OCC, OTS, FRB, and by ammendment, HUD. When it was in existence, the RTC was also part of this group. Maybe the feds will bring back the RTC.

The GSEs don't answer to these regulators. They have their own regulator, formerly known as the Office of Federal Housing Oversight (OFHEO), but recently revamped as the Federal Housing Finance Administration (FHFA). That agency still isn't a a member of the ASC or a party to FIRREA.

 

[Webbed Feet]

Where in the federal law says that FHA and VA loans are not federally related transactions?

<.....snip....>

or you have any link to government site that says FHA and VA loans are not Federally Transactions, please point them to me.

FIRREA applies to the lenders that are under the jurisdiction of the federal banking regulators, i.e., FDIC, NCUA, OCC, OTS, FRB, and by ammendment, HUD. When it was in existence, the RTC was also part of this group. Maybe the feds will bring back the RTC.

The GSEs don't answer to these regulators. They have their own regulator, formerly known as the Office of Federal Housing Oversight (OFHEO), but recently revamped as the Federal Housing Finance Administration (FHFA). That agency still isn't a a member of the ASC or a party to FIRREA.

Pointing...>http://oregonaclb.org/aclb_prod/images/stories/pdf/Summer2005Newsletter.pdf

Turn to page 12.... be sure to read the conclusion on page 13 as well as the last paragraph on page 12

 

[moh malekpour]

Pointing...>http://oregonaclb.org/aclb_prod/images/stories/pdf/Summer2005Newsletter.pdf

Turn to page 12.... be sure to read the conclusion on page 13 as well as the last paragraph on page 12

Item 9 of post #52 which has 13 Items that are exceptions from FRT is the same as the last paragraph of page 12 of your link but there is a caveat here. The link is referring to SMT-10 but SMT-10 is currently retired
(9) The transaction is wholly or partially insured or guaranteed by a United States government agency or United States government sponsored agency

 

[Ken B]

So that everyone is on the same page, HUD insures and VA guarantees. Both are U.S. government agencies.