- Joined
- Jul 26, 2005
- Professional Status
- Certified Residential Appraiser
Go here to see what Dodd proposed:http://dodd.senate.gov/index.php?q=node/4167
Here is the part that has to do with appraisals:
Title IV – Good Faith and Fair Dealing In Appraisals
Requirements for Appraisers
Appraisers owe a duty of good faith and fair dealing to borrowers.
No lender may encourage or influence an appraiser to “hit” a certain value in connection with making a home loan. In addition, a lender may not seek to influence an appraisers work, nor select an appraiser on the basis of an expectation that he or she will appraise a property at a high enough value to facilitate a home loan.
A crucial cause of the current mortgage meltdown has been inflated appraisals. Many ethical appraisers complain that lenders will only use appraisers who consistently value properties at the levels necessary to allow the loan to close. Appraisers who do not cooperate simply do not get hired. This is particularly detrimental to the homeowner because it leads the homeowner to believe he or she has equity where little or none may exist.
Appraisers must obtain bonds equal to one percent of the value of the homes appraised.
Remedies available to borrowers
Lenders must adjust outstanding mortgages where appraisals exceeded true market value by 10 percent or more.
When an appraisal exceeds market value by 10 percent (plus or minus 2 percent) or more, a borrower has a cause of action against the lender. A consumer who is awarded remedies under this section shall collect from the appraiser’s bond.
Actual and statutory damages up to $5,000.
Here is the part that has to do with appraisals:
Title IV – Good Faith and Fair Dealing In Appraisals
Requirements for Appraisers
Appraisers owe a duty of good faith and fair dealing to borrowers.
No lender may encourage or influence an appraiser to “hit” a certain value in connection with making a home loan. In addition, a lender may not seek to influence an appraisers work, nor select an appraiser on the basis of an expectation that he or she will appraise a property at a high enough value to facilitate a home loan.
A crucial cause of the current mortgage meltdown has been inflated appraisals. Many ethical appraisers complain that lenders will only use appraisers who consistently value properties at the levels necessary to allow the loan to close. Appraisers who do not cooperate simply do not get hired. This is particularly detrimental to the homeowner because it leads the homeowner to believe he or she has equity where little or none may exist.
Appraisers must obtain bonds equal to one percent of the value of the homes appraised.
Remedies available to borrowers
Lenders must adjust outstanding mortgages where appraisals exceeded true market value by 10 percent or more.
When an appraisal exceeds market value by 10 percent (plus or minus 2 percent) or more, a borrower has a cause of action against the lender. A consumer who is awarded remedies under this section shall collect from the appraiser’s bond.
Actual and statutory damages up to $5,000.
