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

[Couch Potato]

Oh boy, another thread on this subject.

Like the AMC's won't end up as the national clearinghouse, still getting 50%+ of the appraisal fees.

No way it will be anything less than 65%. :new_all_coholic:

 

[Fred]

No way it will be anything less than 65%. :new_all_coholic:

Maybe you are right. But at least you seem to understand that it makes no business sense to want a middleman to get between you and your client.

 

[Kevin Mc]

Stupid me.

Maybe you are right. But at least you seem to understand that it makes no business sense to want a middleman to get between you and your client.

I was under the impression that the middle man was the problem when Andrew Cuomo started his investigation.

 

[George Hatch]

The law of unintended consequences is never far away. This might strengthen the hand of the AVMs and Z-AVMs. It might strengthen the hand of some otherwise marginal AMCs that would have gone under this year but may now be able to weasel their way into some big accounts.

AMCs are nothing more than overgrown fee shops. The GSEs might be able to cut all AMCs out of their engagement loop because as companies they can make those policies; but I don't see how the federal and state governments can do it via regulation.

The pressure points probably will move elsewhere, but it's possible that where it migrates might be easier to monitor and control.

With respect to the appraiser independence issue, the original intent of FIRREA was to hold the direct lender responsible for the engagement of the appraiser and to cut the loan origination end of the business out of the appraiser-client relationship. That was never a bad idea. No matter what, it has got to be easier to ride herd over the limited number of direct lenders than to attempt to chase stray loan originators.

The trick - and frankly, I doubt it will happen - is to bring all the lenders that are not currently required to adhere to FIRREA under the same or similar requirements. Hold them all accountable for their selection of appraisers and their use of the appraisals, and enforce those rules rigorously.

That way, if they use an AMC it won't be for the express purpose of passing the buck for diligence or turning a blind eye to misconduct.

 

[Kali the Boston Terrier]

Problem is funding the model, the only likely source with the means and the system is the AMC. Talk about a March Christmas gift for the AMCs, wonder if any of the AMC are going to offer an IPO soon? But if you think LSI and Valocity really have a good hand, think more about Zaio. Publicly traded (accountable, kind of), large infrastructure, and led by all former AI muckety mucks. All these leader types all have strong Gov't connections, and FNMA contacts...

Just a prediction, but I am fairly confident that might be a strong move espeically thinking that Cuomo is investigating LSI right now too. So why would FNMA pick them, Zaio is the oly group that appears to have its hands clean so far.

 

[Kali the Boston Terrier]

By no means interpret my last post as a Zaio endorsement, I cannot stand the idea...but then again FNMA is not asking my opinion.

 

[Randolph Kinney]

Just daydreaming here.....

Let's say the mortgage brokers are cut out of the engagement loop for appraisals that are used by these lenders.

Does that mean the wholesale mortgage business just evaporates overnight? Doubt it. They'll still want to develop packages and submit them to their lenders. Some of them may choose to do that without any idea of whether the property will appraise out, but they won't all be so anxious to roll that dice.

I suspect what you will really see, mortgage brokers will have their favorite appraiser submitted and approved to be on their funding lender's fee panel.

This way the mortgage broker will be working behind the scene with their appraiser knowing any loan package submitted will get their appraiser assigned to appraise the property.

It is no different than brokers asking appraisers if they are Countrywide / LandSafe approved. It is no different than the eEappraiseIT and WaMu having their own approved appraiser list.

 

[Fred]

I was under the impression that the middle man was the problem when Andrew Cuomo started his investigation.

That's bureacratic thinking at work. The solution to failed bureacracy is always new bureacracy and never no bureaucracy - if they could just fine-tune or give it a little more power or re-arrange the deck chairs, utopia will certainly emerge.

 

[Joyce Potts]

So many criticisms, so few alternative answers. Fire away.

 

[Bigrock]

maybe its time to buy a zone....ahhhh
I will go retail first....