Mejappz
Elite Member
- Joined
- Dec 16, 2005
- Professional Status
- Certified Residential Appraiser
- State
- Florida
Of course, Fannie knew about this all along. One has to accept that it's probably of their own making. After all, they have known about fraudulent lenders and AMC behavior for a while.
After years of due diligence being more of a T-shirt slogan than actionable practice at the GSEs, it’s a significant and well-informed escalation. I’ll note that many of the above issues have come up in the mortgage-fraud cases that have been playing out over the past 18 months: appraisers have been dinged, brokerages have been blacklisted, and sponsors are facing slammer time – I recommend reading our Xmas recap here. Fannie also has a sponsor blacklist of 8 players, per TRD, w/ internal emails showing $700M in exposure to them as of March ‘24.
There’s historically been no clean line to separate merely questionable activity from outright wrongdoing – as convicted fraudster Eli Puretz recently put it: “From light gray to dark gray goes very very fast.” The pain point for lenders: These add’l hoops could slow down dealmaking thru Fannie, an agency which already isn’t known for moving fast – Jamie Dimon would have something to say about its remote-work policy
Fannie (Cont.)
The guidelines, effective 4/1, tell lenders to ask Qs abt the ecosystem ️ of a mortgage deal, IDing various nodes – appraisals, property management, capstack – that could corrode the transaction. On appraisals, for e.g., it states: “Is there a reasonable explanation for the inconsistent data or the use of a valuation method by the Appraiser that is inconsistent w/ standard practices?” It asks lenders to look for unconventional financing arrangements, rapid re-trading of assets, & discrepancies in figures submitted to underwriting vs. asset management. It also gives significant ink to the issue of arms-length deals - lenders should understand the r’ship btw. the sponsor and the entity providing cash for the closing. And then there are tinier but still-spicy things: discrepancies in font styles, or unusual spacing.After years of due diligence being more of a T-shirt slogan than actionable practice at the GSEs, it’s a significant and well-informed escalation. I’ll note that many of the above issues have come up in the mortgage-fraud cases that have been playing out over the past 18 months: appraisers have been dinged, brokerages have been blacklisted, and sponsors are facing slammer time – I recommend reading our Xmas recap here. Fannie also has a sponsor blacklist of 8 players, per TRD, w/ internal emails showing $700M in exposure to them as of March ‘24.
There’s historically been no clean line to separate merely questionable activity from outright wrongdoing – as convicted fraudster Eli Puretz recently put it: “From light gray to dark gray goes very very fast.” The pain point for lenders: These add’l hoops could slow down dealmaking thru Fannie, an agency which already isn’t known for moving fast – Jamie Dimon would have something to say about its remote-work policy
Fannie's Talking to the Right Crew & Multi Mega-Recap
Whale of a time in BK, CIM's Salt Lake sizzle & a teacher tantrum in Midtown
ten31.beehiiv.com
Fannie's Talking to the Right Crew & Multi Mega-Recap
Whale of a time in BK, CIM's Salt Lake sizzle & a teacher tantrum in Midtown
ten31.beehiiv.com
