HVCC FREAB Teleconference

[Deuce of Spades]

Attached is a notice of a FREAB Open Teleconference, scheduled for June 23, to discuss the solutions of the Cuomo, Fannie Mae, Freddie Mac, HVCC agreement.


What are our comments? What are our solutions?

my thoughts
AMC's - need regulation, licensing and education
Don't dismiss staff appraisers
Segregate the appraisal departments from the loan production and move them to Risk managment
Required USPAP training for all involved in the loan process (originators, processors, underwriters)

 

[Wendy]

I'm pretty sure the board director wanted us to send in some "solutions" prior to the meeting. This thread could be a good start.

OK - let me get my thoughts in order and I'll be back with something......

 

[Mike Phillips]

(1) Make it mandatory that the borrower be provided with a complete copy of all valuation products used in making the mortgage loan decision no less than 3 business days prior to closing. No exceptions, no opt-out is permitted by the borrower.

(2) Make it mandatory that the borrower be specifically identified as an intended user of the appraisal. (Side note: So you want the AMC to be concerned about their liability? Then be willing to accept some liability.)

(3) Phase out - eliminate the use of Licensed (big L!!!) appraisers in all 50 states within 3 years for all residential mortgage loans.

(4) Consolidate residential appraisal standards/requirements/guidelines and establish a standard for all residential appraisals done in connection with a mortgage loan. Pre-set the report forms/SOW for Desktop Valuation, Drive-By and Full appraisal, and set criteria based on LTV where each must be obtained.

(5) Given consolidation and a pre-set standard, eliminate the client name on all residential appraisals done for mortgage loan purposes thereby making the appraisal completely portable. (Side note: So you want to reduce costs to the consumer and stop lenders from holding the borrower hostage?)

(6) Restrict the use of staff appraisers to the review function only.

Just off the top of my head.

 

[BOB PADRICK]

require that companies use an approved list which appraisers can apply for

...but approval will be by either state-level or local level approval boards NOT paid for by the lender. As part of an IVPI styled solution, make the appraiser approvals part of the process.

Further, once on the individual lender's approved list, any removal from that list must be approved by that same committee (or a similar one), and can only be for just cause, not for "missing value", "killing deals", or "not playing ball", and not for simple typos/omissions but rather for fraud, failure of due diligence, etc.

Blacklists by lenders would be specifically prohibited.

every appraisal assignment for FRT must be reported to a national registry (not the appraisals themselves-not sure the black helicopter watchers are ready for that yet, though I'd be OK with it). This to prevent number hunting for appraisal values by just ordering until you get what you need.

All first and second mortgages must be done with interior inspection "full" appraisals. AVM's may be used, but for less than 1% of any lender's portfolio, and no loans made on the basis of an AVM may be resold to anyone other than the original lender, and may not be "upgraded" using a regular appraisal. Conversion from AVM-both existing and future-to conventionally backed products will require 2 full appraisals and a IVPI review.

All loan originators must be individually licensed, including fingerprinting and background checks. Any type of previous fraud conviction will result in immediate loss of license. Fines for losses must be fully restorative, including for predatory loans (equity stripping etc).

simple typo type corrections may still be requested-but any value reconsideration requests must be made through the IVPI.

That's a start-lots more ideas, just not enough time.

 

[Deuce of Spades]

I'm pretty sure the board director wanted us to send in some "solutions" prior to the meeting. This thread could be a good start.

OK - let me get my thoughts in order and I'll be back with something......

Do you know the 'process' for us to send this info in? Is there a place for us to send it?

 

[Wendy]

Do you know the 'process' for us to send this info in? Is there a place for us to send it?

If I remember right - Thomas O' Bryant (FREAB Director) was requesting that they be emailed to him. I have no idea what his email is.

Anybody remember differently?

 

[BOB PADRICK]

Thomas O'Bryant, Jr is the Director of the Division of Real Estate, not FREAB. FREAB's Chairperson is Joni Herndon.

Some contact info is found here:

http://www.myflorida.com/dbpr/re/FREABMembers.html

specifically, there is an orlando phone and fax number for Thomas found there--

850-487-1395, fax 407-317-7245 . It appears to be for the local DRE office at 400 W. Robinson St.

 

[J in Florida]

If I were King of the Forest:

AMC's--regulate the crap out of them or outlaw them completely. Tics & Leeches. Fat little parasites.

Loan Originators--require continuing ed that includes extensive appraisal stuff and hold them legally and financially accountable for the appraisals in their loan files.

State Investigators--must be certified appraisers and have a soul.

State Boards--give them sufficient funding to go after the true criminals rather than hammer the guy who missed 1 fireplace and 2 ceiling fans for dough (true story--I was there I saw it)

Borrowers -- keep them out of the appraisal process altogether. It's none of their bleeping business. They have no understanding of the process--why it is, what it is, and what it's use for. They are the most uneducated part of the process. If they're concerned about the property, it's value and it's characteristics order your own damm appraisal and pay for it.

Lenders -- prohibit them from charging the borrower for the appraisal that they use for their own lending decision. Let them take it out of the thousands they get at loan origination.

 

[Deuce of Spades]

Add licensing for loan officers and mortgage brokers requiring USPAP coursework.

 

[Wendy]

Rather than the HVCC we need:

1) Regulation of AMCs. Licensing by the state and adherence to USPAP is a start. If they are reviewing appraisals - they better be certified and geo-comp.

2) Transparency to borrowers concerning the appraisal fee. I propose 2 lines on the HUD1 for appraisal. 1 - Direct appraisal fee. and 2 - Appraisal management fee. or some such wording. Make it very clear to the borrower that AMCs are just one more hand in the pie and costing them money too.

3) Originator accountability. This is a no-brainer and I can't understand why it does not exist.

4) ABSOLUTELY no targets or values allowed on appraisal orders - written or verbal. Period.

I also agree with:
-Mike's points 1, 4, 5 & 6.
-Deuce's segregation idea.
-All of Bob's points
& I'm sending J some sevin dust for the AMCs!