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

[Lobo Fan]

RELS and Quantrix and eappraiseit are all owned by First American. Landsafe I think is the only one I know of actually owned by the lender. Would that be considered a staff appraisal? Interesting thought.

 

[PropertyEconomics]

Or the law of plausibly deniable intended consequenses.

Thank you Marcia .. what was I thinking .. you are right .. the government is involved. One would have to be able to deny what they intended when what they intended happens. My apologies for not thinking clearly on a Saturday morning.

 

[John Hassler]

The initial issue I see with talks between Fannie & Coumo is that Fannie is in no way an altruistic organization. Fannie wants what’s best for Fannie, not borrowers, not appraisers, not mortgage brokers, and not lenders. I do hold out the sincere hope that Mr. Coumo, if he does act, will do so in the best interests of all parties and not in the financial interests of few.

It is apparent that enforcement of ethical conduct by government oversight of appraisers, MBs, and lenders has failed. While this failure could be political on some levels it appears to have been primarily due to a lack of funding and manpower. It is rather evident that asking people to do the ethical because it is the right thing to do has failed in this industry.

Any solution is going to need more accountability by all those involved whether it be from the public sector (more enforcement or new regulations), private sector (bonding, rating services, etc), or a combination of the two. Given the allegations of misdoings between WAMU & eAppraiseIt, I don't hold much, if any, hope that ordering through an AMC is the answer. Most of the failures coming to light are from those participants who primarily sold to the secondary market and in many instances involved use of AMCs. I’m very curious as to what percentage of portfolio lenders/loans utilized AMCs. My guess is that it’s a much lower than those of lenders/loans sold to the secondary market.

 

[rcsone]

......education's answer for a kid who cannot learn to drive is to buy a different color car..........maybe, the answer to appraisers' concerns about inadequate enforcement could be a different Barney Fife badge..........best to all..............rs

 

[BOBBYGINE]

The future.

Fewer clients, middleman, Lower fees. Lower fees. Lower fees.Lower fees, lower fees

I called the local AI chapter president and have heard nothing. Although I did read an article where a high ranking AI guy said that this sounds like a great deal. And have you heard about the possible NAR-AI alliance.??? Wow

 

[Brad Ellis]

Workbox,

Not FHA unless they end up adopting the same policy. This is for the GSEs- specificaaly Fannie first.

Ms. Janet!

I'm blushing. :Emoticon_hug:

Bearslide,

I was looking for the post you did where you question why the lender was not already ordering the appraisal vs. the broker. Could not find it but will address the issue generally, and some history is needed.

Over the past decades more and more loans were originated via the brokers- by some accounts about 70%. The reason for that is (or was supposed to be) two fold: 1) less expensive for a lender to fund a brokered loan and pay the YSP than to maintain their own marketing staff, advertise, etc. and 2) in theory, at least, the broker could find the best product for the borrower. Yeah, I know so many of them never did that but it was part of the theory anyway.

So, why didn't lenders demand that they order the appraisal? Pretty simple, actually- the brokers did not want to give up their control over the loan, be unable to pressure appraisers, etc.

If your operation does a lot of these loans and you refuse to deal with the broker the way everyone else deals with the broker, well the broker just takes the business elsewhere. And if you are an account rep you are going to pressure your own firm to deal with them in the same way- and that is what happened.

Note that this is not just about the appraisals at all. It is also what caused the crazy loan types to be offered as well. If I am a broker and I want to do a Stated income, No asset verification, Sub-prime, Venti, Lowfat Sugar-Free Mocha mortgage and your firm does not offer these while others do- why would I give you only the loans you want? Nope- I am going to tell you that if you do not do those loans then my business goes elsewhere.

Now of course, SOMEONE had to actually develop the product to offer- and that is the fault of the funding lenders, the investors, Wall St., the ratings agencies, and everyone else. Then couple that with rapidly rising home prices that would cover any problems and you see the loans not being analyzed very closely.

So, if you are the CEO of a major lender and all your competitors offer that stuff but you (because you are actually a smart person and knew they'd eventually go bad) refuse to do so, well you are out of a job because 70% of the market will not deal with you.

And we can point our fingers, but it is going to be kind of circular. By that I mean it is like standing everyone up in a circle and asking whose fault this is? Then everyone points to the person to the left until it ultimately gets around to the first person and no answer is ever revealed.

I'll tell you who is at fault: Lenders for offering stupid products, brokers not doing their own jobs and actually trying to find the best product that is actually suitable for the borrower, appraisers for not standing up strongly enough to the pressure, investors and Wall St. for buying stuff they did not understand or perhaps did not even try ot analyze, ratings agencies for turning a blind eye to the product types and blindly offering investment grade ratings, GSEs for not taking a firmer stand earlier, regulators for not demanding full common sense analysis, and on and on.

No one lacks blood on their hands- even the borrowers who lied about income, engaged in raw and incredibly dumb speculation, builders who over built for markets etc. And let's not forget the fraudsters in all this either.

Frankly, I doubt that we could find any industry at all who does not make these sort of mistakes; history is replete with these stories.

What is important now, in my view, is not only to impement the fix but to make sure the fix is done correctly. And that brings us full circle to this Fannie/Cuomo announcement.

From the appraiser's viewpoint, it behooves us to approach it logicaly, sensibly, and to try to offer guidance that gets us to where we need to be and not to some point that ultimately just exacerbates the problem.

Brad

 

[Mr Rex]

Thanks Brad. Well said. Its not likely that we will return to the halcyon days of old, but like the 05 Fannie Forms, if we don't stamp our feet and gnash our teeth in public now we will probably not like the outcome proposed by the fat girl and her semi-retard cousin.

 

[jnordquist]

I think we need to act and not stand around and let our industry vanish.

 

[Kevin Mc]

Agreed.

I think we need to act and not stand around and let our industry vanish.

if you haven't e-mailed everyone involved I suggest you do it. I suggest e-mailing all your elected officials. Write letters to the editor of your newspapers...be loud.

 

[JC California]

I believe that Mr. Ellis is mostly correct, but I don’t know if the decision makers are asking for our guidance. Change can sometime be a good thing, but often not all involved receive the benefits.

I have not read this entire thread, nor do I claim to know everything on the subject, but question why a state AG is allowed to be part of the policy making for all the states?