Just what is an FRT and when does your appraisal Fall under Designation ?

[Mike Kennedy]

Title XI [12 U.S.C. 3331-3351] in SEC. 1121.


See Post 11.

 

[Howard Klahr]

In addition, Title XI specifically requires appraisals by licensed or certified appraisers for financial transactions for the Federal National Mortgage Association (Fannie Mae); the Federal Home Loan Mortgage Corporation (Freddie Mac); or the Resolution Trust Corporation (RTC), the agency created by the Congress to liquidate the assets of the nation's failed savings and loan institutions. Although not specifically mentioned in Title XI, loans insured by the Federal Housing Administration (FHA) and loans guaranteed by the Veterans Administration (VA) are also considered federally related financial transactions.

The information noted above in bold is NOT part of the FIRREA legislation and is not incorporated into any rule or regulation issued subsequent to the passage of FIRREA. Contrary to popular belief, Fannie Mae, Freddie Mac, nor the VA represents FRTs (not in the definition). In regards to FHA, it depends on what institution is considering the loan in that HUD does not issue mortgages, but only guarantees them.

That said, Fannie, Freddie, FHA and VA have choosen to require the use of licensed or certified appraisers in there appraisal policies, but this does not incorporate them into the FRT umbrella.

 

[Webbed Feet]

Mr. Klahr,

I tell em to read starting on page 12

http://oregonaclb.org/media/Summer2005Newsletter.pdf


They don't listen..... Hey, not my problem anymore I guess!

Webbed.

 

[Mike Kennedy]

The information noted above in bold is NOT part of the FIRREA legislation and is not incorporated into any rule or regulation issued subsequent to the passage of FIRREA. Contrary to popular belief, Fannie Mae, Freddie Mac, nor the VA represents FRTs (not in the definition). In regards to FHA, it depends on what institution is considering the loan in that HUD does not issue mortgages, but only guarantees them.

That said, Fannie, Freddie, FHA and VA have choosen to require the use of licensed or certified appraisers in there appraisal policies, but this does not incorporate them into the FRT umbrella.

http://www.HUD.gov/offices/hsg/sfh/res/resindus.cfm See #6

Coverage (24 CFR 3500.5)
RESPA is applicable to all “federally related mortgage loans.” They are:
• Loans (other than temporary loans), including refinancings, secured by a first or subordinate lien on residential real property that is improved with either:
​

Real Estate Settlement Procedures

2 Comptroller's Handbook

– A one-to-four family structure (including individual units of
condominiums and cooperatives), either existing or to be
constructed on the real property, using loan proceeds.
– A manufactured home, either existing or to be placed on the real property, using loan proceeds.
And to which any one of the following applies:
– Loans made by a lender, creditor, or dealer.
– Loans made or insured by an agency of the federal government.
– Loans made in connection with a housing or urban development
program administered by an agency of the federal government.
– Loans made and intended to be sold by the originating lender or creditor to Federal National Mortgage Association (FNMA), Government National Mortgage Association (GNMA), or Federal Home Loan Mortgage Corporation (FHLMC), or its successor.
– Loans that are the subject of a home equity conversion mortgage or reverse mortgage issued by a lender or creditor subject to the regulation.
– Instalment sales contracts, land contracts, or contracts for deed on otherwise qualifying residential property, if the contract is funded in whole or in part by proceeds of a loan made by a lender or creditor subject to the regulation.
-----------------------------------------------------------------------------------

Example STATE of Georgia:​

http://www.greab.state.ga.us/articles/federaltransaction.html
​

 

[CANative]

Summary of Oregon's newsletter on FRT's:

It is unless you say it isn't. It isn't unless you say it is.

 

[Howard Klahr]

The language contined in the FIRREA legislation is quite clear. The term utilized is "Federally Related Transaction". This term does not equate to your reference of "Federally Related Mortgage Loans" from RESPA

Title IX was passed over 15 years ago, RESPEA closer to 35 years. If the intent was to merge the language between these two very seperate and distinct forms of legislation, I would think that those drafting these documents would have done so.

With all deference to the Georgia Real Estate Appraisal Board, their interpretation as explained on their web site is just plain wrong. If they are correct in thier assumptions, why are they the sole source for this interpertation? None of the appraisal guidelines produced by Fannie, Freddie, HUD or the VA reference their inclusion in the definition of Federally Related Transaction. Nor does any other state regulatory authority provide a similar interpertation. You will notice that the one previously referenced from Oregon actually summarizes a Q&A authored by the Interagency Work Group that FIRREA established. Fannie, Freddie, HUD and the VA are noticiably absent from this group.

Obviously you are free to produce appraisal reports however you see fit. However, in the Advisory Opinions and the Statements issued by the Appraisal Foundation do not conform to your interpretation.

All that and I still manged to convey my point all without reverting to an over sized font for emphasis.

 

[Mike Kennedy]

1. occasionally copying and pasting from another site with different fonts results in enlarged postings - unintentionally.

2. based on the following - it appears Howards' information is correct.




[FONT=arial, helvetica, sans-serif]
[FONT=Arial, Helvetica][SIZE=-1][/FONT]
[FONT=Arial, Helvetica]6000 - FDIC Bank Holding Company Act[/FONT]
[/SIZE][/FONT]


see 225.63 9, 10
http://www.FDIC.gov/regulations/laws/rules/6000-1700.html

 

[Howard Klahr]

Hey Mike,

Thanks for the acknowledgement. My persistence was to just get the correct information out there to best assist those that rely on the forum as an information source. If those of us in the business can't agree on these issues how can we expect the clients to understand? I appreciate your continued efforts to find the correct information sources.

 

[Mike Kennedy]

HK - persistence and insistence are the hallmarks of a pro. Happy New Year and thanks.