Deal Nears to Curb Home-Appraisal Abuse, Coumo, Freddie Mac and Fannie Mae

[The Bob]

Governmet involvemenrt really scares me. Notice who it is that wants to get this settled, Fannie & Freddie two that created this mess. Here is a simpler idea. When bad Appraisals are found Fine the bad Appraiser.

If they made lenders eat the bad loans, whether it was due to fudged income/assets, or a bad appraisal, this problem never would have gotten as bad as it did. The problem was that the person that ultimately ended up with loan, had no way of knowing what he was he buying.

You can carve this is stone.........

As long as the person choosing the appraiser has a vested interest in the outcome, you will always have pressure on the appraiser.

But hey, it's a start.

 

[Rudy Canoza]

But I thought "Lender Select" was supposed to cure the problem. The .gov endorsed it because of the S&L crisis. And HUD quickly jumped on board.

Are Fannie and Freddie now saying that "Lender Select" is a bad idea and responsible for the sub-prime crisis? Will FHA go back to a Fee Panel?

/The circle of life is complete...

 

[Marcia Langley]

And of course this proposal as stated would only apply to Freddie and Fannie destined loans. If an appraiser recieved an order for an appraisal outside of the clearing house, the old debate on whether their forms should be used if not in compliance with their guidelines may take on a different character. It may become a non-issue if there were a safeguard that Freddie/Fannie never received an appraisal unless it came through the clearing house.

It would also highlight to clients the importance of being clear in their assignment whether compliance with the GSEs was a part of their assignment condition. That would be a very good thing.

It was brought to my attention that the exclusions as stated may not include builder-owned mortgage companies. This would need to be made totally comprehensive for all Freddie/Fannie destined packages. No loopholes.

 

[Kevin Mc]

I doubt it.

At the very least this ought to do away with the scourge of mortgage broker-ordered appraisals. This obvious conflict of interest has been permitted for entirely too long.

Mortgage Brokers become Mortgage Bankers, problem solved (on their end). Whole different set of rules for Mortgage Bankers that I'm sure will sidestep all this legislation (or if it doesn't, they are working on it). Call me a pessimist (or a realist) but like licensing, a whole new round of legislation isn't going to cure industry ills. It's like the expression "think globally act locally". If every state truly oversaw their statewide network of MBs and appraisers and did serious enforcement things would improve. Time will tell.

 

[Pamela Crowley (Florida)]

Another link to similar article:

http://www.reuters.com/article/businessNews/idUSN2544854320080226

 

[JENIFFERW]

I hope these questions don't sound dumb, but can someone define a "wholly owned subsidiary"? Is say, EA a "wholly owned subsidiary", and what is the difference between that an another type of AMC that would be accepted? Could someone like EA just change the type of company they are by filing some paperwork, and then they would be just fine to use again?

 

[lenfishman]

Here is my take. FHA already did away with testing of appraisers. They are building the foundation a clearinghouse already.

 

[Marcia Langley]

Jen,

In this case they are referring to an AMC that is a wholly owned subsidiary of the bank who needs an appraisal. Like Countrywide owns Landsafe. Since CW owns Landsafe, it is the same relationship as if they were their in-house employee.

eAppraiseit is a wholly owned subsidiary of First American who is not a bank.

 

[Pamela Crowley (Florida)]

Landsafe is a wholly owned subsidiary of Countrywide.

RELS is some form of joint venture of Wells Fargo and First American.

Quantrix is is some form of joint venture of Chase and First American.

Etc... Etc... Etc...

The way this is worded would exempt almost all the AMCs.

The AMCs compete with each other. The primary competition is how many of the appraisals will result in a loan closing?!?!!!!! How is that good for the real estate business and the GSEs and the borrowers and the Wall Street investors?????

 

[JENIFFERW]

I think I see them just changing to an "unwholly" owned subsidiary and doing business as usual...I'm spending my day writing to Cuomo, FNMA, my local Congress representative, as well as the Financial Services committee in DC. I don't have any appraisals to do, so what the heck