• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

HVCC and Bond News

Status
Not open for further replies.

Mystery man3

Junior Member
Joined
Jul 26, 2005
Professional Status
Certified Residential Appraiser
Some guy from Zaio wrote this but it says whats going on up on the hill:

As Congress winds toward its summer recess, the mortgage lending and finance problems linger. With rising fuel costs, hints of inflation, record levels of both foreclosures and mortgage fraud - Washington lawmakers are considering a number of bills designed to shore up the sagging housing market and add a shot of energy to the economy.

Last year, the House of Representatives passed a bill (H.R. 3915) that includes a ban on improper influence on appraisers. Coercion, extortion, instruction, intimidation, threat of non-payment and bribery are all mentioned as specific acts, which would be banned under the law. The bill has not been brought up by the Senate although the Senate is actively pursuing related legislation on mortgage finance matters and FHA authorizations.

In addition to supporting appraiser independence, the bill requires the Appraisal Subcommittee to issue detailed reports on state enforcement actions and supplies the subcommittee with authority to issue rules relative to overseeing state appraisal licensing and certification laws. It is no secret that the subcommittee has been criticized for not being more aggressive in its oversight responsibilities and, if passed by the Senate, this bill would help address that concern. The bill would provide authority for states to receive some funding for enforcement in the form of grants from the subcommittee.

In the Senate, Chris Dodd, chair of the Senate Banking Committee has held hearings and has introduced S. 2452, “The Homeownership Preservation and Protection Act,” which contains a requirement for a “surety bond” for appraisers. The cost of such a bond for appraisers would be 1% of the aggregate value of all homes appraised. Estimates for the cost of such a bond are between $10,000 and $40,000 per year for appraisers. This bill has not passed the committee but it is still considered a possibility.

It is evident that members of Congress are attuned to the economic realities of their states and districts. Knowledge that many people are facing foreclosure and loss of their homes is real motivation for Congress to act. Recently, the FHA bill in the House (H.R. 5830) has allowed for bargaining between the Senate and House. Designed to allow FHA greater flexibility in its lending programs, appraisal provisions are a part of the mix. Appraiser competency provisions are contemplated as well as FHA-specific education.

As you recall from my last article, the New York Attorney General, Andrew Cuomo, has pursued an agreement with Fannie Mae and Freddie Mac relative to appraiser independence. The Home Valuation Code of Conduct or HVCC has stimulated a lot of debate and even controversy. At a recent Senate Banking Committee hearing Senator Elizabeth Dole was prepared to offer an amendment which would have directly impacted the HVCC agreement and put the issue into the federal bank regulatory arena.

However, as of this writing, the amendment has not been considered. Nevertheless, because of the time limitations involved with getting legislation through Congress and the need to take action on mortgage reform and economic stimulus, no one can predict exactly where these various banking bills and amendments may merge or land.

While Congress is poised to act, the question is how and when. With 90% of appraisers in a recent survey indicating that they had been inappropriately pressured, many in the industry see a clear correlation between the worsening mortgage crisis and the compromise of appraiser independence. Lately, many are asking a simple question that continues to go unanswered: How much higher do foreclosure rates need to rise and mortgage fraud cases increase before Congress and regulators realize that appraiser independence is a real problem that affects the safety and soundness of our entire banking system?

Confidence in our mortgage sector cannot be restored until appraiser independence is taken seriously. Meaningful Congressional reforms are a key step in that direction.
 

hovious

Sophomore Member
Joined
Mar 14, 2007
Professional Status
Certified Residential Appraiser
State
Illinois
Still stirring up the same soup. No real news as of yet. My bet is that any federal legislation signed into law will trump the HVCC. This appraiser still thinks the HVCC will be dropped or significantly amended.
 

Mystery man3

Junior Member
Joined
Jul 26, 2005
Professional Status
Certified Residential Appraiser
Congressional summer recess starts August 11th. Hopefully something passes by than I am tired of guessing.
 

reggieP123

Freshman Member
Joined
Jun 11, 2008
Professional Status
Certified Residential Appraiser
State
Ohio
Me too! Let's just get something beneficial to appraisers done!
 

John Hassler

Senior Member
Joined
Jul 23, 2002
Professional Status
Certified Residential Appraiser
State
California
The bond issue presents an interesting dilemma for ZAIO. On the one hand, if they support it and it's enacted soon it could well shrink the ranks of the general appraiser population and give them a larger potential pool of work. This would come at no immediate cost since no z2055s have been delivered. On the other hand if the bond becomes reality, when (if?) ZAIO begins selling z2055s then a good portion of the ZOs 44% split vanishes. If the average US home is $200,000 and the bond is 1% that's $20. Probably not the end of the world on, say, a $300 appraisal fee but that's a huge chunk of, say, a $100 z2055 fee with only $44 going to the ZO.
 

Mystery man3

Junior Member
Joined
Jul 26, 2005
Professional Status
Certified Residential Appraiser
The bond issue presents an interesting dilemma for ZAIO. On the one hand, if they support it and it's enacted soon it could well shrink the ranks of the general appraiser population and give them a larger potential pool of work. This would come at no immediate cost since no z2055s have been delivered. On the other hand if the bond becomes reality, when (if?) ZAIO begins selling z2055s then a good portion of the ZOs 44% split vanishes. If the average US home is $200,000 and the bond is 1% that's $20. Probably not the end of the world on, say, a $300 appraisal fee but that's a huge chunk of, say, a $100 z2055 fee with only $44 going to the ZO.

Just to to you know one percent of $200,000 is $2000.
 

David Beasley

Senior Member
Joined
Dec 12, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
In the Senate, Chris Dodd, chair of the Senate Banking Committee has held hearings and has introduced S. 2452, “The Homeownership Preservation and Protection Act,” which contains a requirement for a “surety bond” for appraisers. The cost of such a bond for appraisers would be 1% of the aggregate value of all homes appraised. Estimates for the cost of such a bond are between $10,000 and $40,000 per year for appraisers. This bill has not passed the committee but it is still considered a possibility.

I just sent my senator (Elizabeth Dole R-NC) an e-mail/letter from her senate website putting forth our arguments about these bonds being genuinely cost prohibitive for EVERY appraiser I know, even the General Certs that "stay busy all the time".

I ask her a hypothetical about where the real estate valuation system would be if we up and just lost 90% of the current appraisers if and when this "bond" requirement came to pass. Implored her to see that this was incredibly counter intuitive to what they were actually trying to accomplish, yada yada...Ask her to please instigate a modification, lead the defeat of the bill, or bring up the consideration that few if any appraisers could afford $10k-$40k in such "bond" premiums each year, and VERY few if any would have $400k-$500k in "personal and liquid assets" it would also likely require in order to qualify to be covered by such a bond.

We'll see what she has to say, if she replies. The boilerplate response said I'd get a letter in the mail if I included my mailing address, which I did.

edit: Forgot to mention, I also sent the same letter to Richard Burr (R-NC), our other senator, just for good measure. He's not on the committee considering this bill, and I think Mrs. Dole is...and is why I drafted it for and sent it to her first.
 
Last edited:

Mystery man3

Junior Member
Joined
Jul 26, 2005
Professional Status
Certified Residential Appraiser
Could handle the yearly fee but 400k to 500k in assests too. That would put me out of business. Haven't see that anywhere though. Where did you get that info?

Maybe I will have subprime loan officer help me prove my assests. LOL
 

elviscostello

Freshman Member
Joined
Dec 28, 2007
Professional Status
Certified Residential Appraiser
State
New Jersey
this article from apprasal scoop Dole Amendment passed!

June 25, 2008

Dole Amendment S. Amdt. 4984 to H.R. 3221 (Foreclosure Prevention Act of 2008) Passed!

According to Bill McKnight of Appraisal Ace:
H.R. 3221 - Foreclosure Prevention Act of 2008 passed with amendment S. Amdt. 4984 by Elizabeth Dole that orders the director of OFHEO to review appraiser requirements in the HVCC and that "the Director shall ensure that the regulation is consistent with appraisal regulations and guidelines issued by the Federal banking agencies (as that term is defined in section 3(z) of the Federal Deposit Insurance Act) and the National Credit Union Administration, including regulations and guidelines related to the independence and accuracy of appraisals, and do not conflict with any other banking regulations.
Bill says, "So, basically, the final form of the HVCC must comply with regulations already in place, many of which the HVCC, as presented on March 3rd, was in conflict."
McKnight spoke today with legislative aide Caylyn Wright, at the Sacramento Association of Realtors. Ms. Wright, on McKnight's behalf, called a National Association of Realtor legislative aide, who agreed the above bill as amended may address our concerns with the HVCC and does not have the appraiser bonding issue in it that S 2452.
Ms. Wright's opinion was that since Congress passed the House version of the bill, the Senate version (S 2452) will likely not be considered in this session of Congress. Mr. McKnight talked to several other individuals who are familiar with legislative procedure and they also believe that S 2452 is probably dead for now.
Amendment number 4984 to the Federal Housing Finance Regulatory Reform Act of 2008 (H.R. 3221) (Jun 24, 2008: Cloture on the Reid motion to concur in the amendment of the House, striking section 1 and all that follows through the end of Title V, and inserting certain language, to the amendment of the Senate, with amendment (SA 4983) invoked in Senate by Yea-Nay Vote. 83 - 9. Record Vote Number: 155.).
Of particular interest in this election year, is that there were only eight non-voting members of the Senate. Can you guess who two of the non-voting Senators were on this important issue? That's right! Sen. John McCain [R] of AZ and Sen. Barack Obama [D] of Illinois!
 

Greg Bell

Senior Member
Joined
Jul 7, 2006
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Louisiana
Could handle the yearly fee but 400k to 500k in assists too. That would put me out of business. Haven't see that anywhere though. Where did you get that info?

Maybe I will have subprime loan officer help me prove my assists. LOL
Bonds are not insurance.They will pay the claim and then sue you for the amount of loss.So There goes your House and retirement.We are out of business if This passes..
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks