Give me a break

[djd09]

Bank of America Class Action $250M Deal Reached ​

February 24, 2020 ​

A $250 million settlement has been proposed in a class action lawsuit filed against Bank of America and Countrywide Financial Corp by mortgage borrowers who claim that the two companies participated in a real estate appraisal scheme.

The plaintiffs in this case allege that the defendants did not give out independent appraisals in conformity with ethical rules set forth by the Uniform Standards of Professional Appraisal Practice (USPAP).

The Bank of America class action lawsuit was initiated after a former LandSafe Appraisal Services Inc. (LSA) manager named Kyle Lagow filed a sealed complaint against Countrywide, LSA, and Bank of America for damages under the False Claim Act. After the complaint was unsealed, Lagow settled the action and a seperate class action was subsequently filed by borrowers.

Bank of America Class Action $250M Deal Reached

A $250 million settlement has been reached in a class action lawsuit filed against Bank of America and Countrywide alleging a real estate appraisal scheme.

topclassactions.com

maybe lagow should chime in. or is he too busy suing

 

[J Grant]

OK, but I am a lender with a loan on your home. Say your payment is currently $2000 and I can refi you and lower the payment to $1650. In that situation, what is gained by having an appraisal? I have your loan and all the associated risk already. Lowering your payment would reduce the loan risk, regardless of how much the home is currently worth or what condition it is in. If your home is now a wreck, well I already have the loan on that wreck.

From the lender POV about "risk", not needed , as you say the borrower is who they are and lowering their payments means easier for them to pay (unless they then just take on a bunch of other debt lol fault -
But the originating lender is not the one who holds the paper long term -if I were the investor, I would want an appraisal or valuation with inspection because the collateral is the only thing I have of value to recoup if the borrower defaults- and why do I want a wreck in my portfolio? Is the new refinance loan going to a new set of investors ?

 

[J Grant]

Why do certain appraisers have an agenda toward diminishing the use of appraisals? What is the upside for their company or agency?

 

[J Grant]

What harm is done by getting a new appraisal on a refinance, to check the property condition and how it compares in value in present market to other properties? Why such interest in not having it done?

 

[alebrewer]

I know of no appraiser who has an agenda toward diminishing the use of appraisals. On the other hand, as a borrower, if I have the choice of two valuation products with similar accuracy (however that is measured) - one at $100 and 5 minutes turn-time, and one at $600 and 2 weeks turn-time, which is the more prudent product to purchase? AND, as a lender, is there no fiduciary responsibility to the borrower to minimize closing costs as much as possible? At the end of the day, I am - first and foremost - a laissez faire proponent. Only secondly an appraiser. If the market can provide an alternative valuation product with similar accuracy as compared to an appraisal that I prepare - and at a MUCH lower cost and turn-time, I probably need to start re-training for my new job...

 

[alebrewer]

What harm is done by getting a new appraisal on a refinance, to check the property condition and how it compares in value in present market to other properties? Why such interest in not having it done?

I see no harm. Nor do I necessarily see much benefit.

 

[Mejappz]

Why do certain appraisers have an agenda toward diminishing the use of appraisals? What is the upside for their company or agency?

Greed, avarice. Follow the money.

 

[alebrewer]

Greed, avarice. Follow the money.

I think you'll find that the average field appraiser makes more than most in the appraisal management world - lender or AMC. That is most certainly true for me at least.

 

[djd09]

Fannie Mae and Freddie Mac​

Fannie Mae and Freddie Mac, which guarantee roughly half of all U.S. home loans, exist to help keep the mortgage market afloat. During the crisis, however, the two firms verged on the brink of collapse, costing taxpayers approximately $188 billion in rescue funds.

In December 2011, the SEC filed charges against six former Fannie and Freddie executives who nearly sunk the mortgage giants, alleging they knowingly misled investors about their exposure to risky subprime loans.

According to the SEC, Fannie told investors in 2007 that it had less than $5 billion in subprime loans on its books. The SEC said the true figure was closer to $43 billion. Similarly, in 2006, Freddie disclosed between $2 billion and $6 billion worth of subprime loans, far short of the $141 billion the SEC alleged was on the books.

Fannie and Freddie entered into agreements accepting responsibility for its conduct, though neither admitted or denied the charges. For their part, the six executives named in the case promised to challenge the government, arguing that the companies consistently disclosed the makeup of their loan portfolios. The cases are ongoing.

Too Big To Jail? The Top 10 Civil Cases Against the Banks | FRONTLINE | PBS | Official Site | Documentary Series

In nearly every major legal case to emerge from the crisis, government prosecutors have won multi-million dollar settlements, but companies and officials have not been required to admit wrongdoing.

www.pbs.org

they got the data

 

[J Grant]

I think you'll find that the average field appraiser makes more than most in the appraisal management world - lender or AMC. That is most certainly true for me at least.

It's not about what those doing the grunt work earn. It is about the profits and compensation to the CEO's top management/share holders - in a capitalist's system they are allowed to earn obscener profits, but when it is earned at my expense due to a govt entitlement to them via a split of the bundled appraisal fee, I have a problem with that.