NAR blast the New Con: Appraisal Waivers

[Mejappz]

Dear Director Thompson: On behalf of the 1.4 million members of the National Association of REALTORS® (NAR), we thank you for your efforts to advance liquidity in the housing finance system over the last four years. However, we respectfully request you halt the planned expansion of Fannie Mae’s and Freddie Mac’s (the GSEs) appraisal waiver programs to entire purchase market in lieu of further analysis and public input. This program poses serious consequences for consumers and the housing finance system and deserves analysis of the quality of valuations, the impact to the market, consumer protections, impact to the housing finance system, and adverse incentives for Fannie Mae and Freddie Mac and what this means for safety and soundness.

As NAR has previously commented, the equal credit opportunity act (ECOA) requires creditors to provide consumers with any a copy of an appraisal or valuation connected to the application for a loan based on a residential property. ECOA states that the term valuation includes, “any estimate of the value of a dwelling developed in connection with a creditor's decision to provide credit, including those values developed pursuant to a policy of a government sponsored enterprise or by an automated valuation model, a broker price opinion, or other methodology or mechanism.”1 Because the GSEs are providing waivers to this important consumer protection as recognized in ECOA, the GSEs should be obligated to provide any valuation they base a waiver on to the consumer since it is used in the credit decision by the originator via the originator’s choice to utilize the waiver.

https://narfocus.com/file/7463

 

[Fernando]

NAR versus the Banks.
No one cared about the appraisers. Now NAR sees the harm how waivers can do to them and got Banks/Lenders' attention.

 

[Surf Cat]

Maybe the role of the real estate appraiser is changing.

Instead of helping the lenders gauge the risk of making a sound lending decision, we'll be working for brokerages, helping agents protect their clients from overpaying for real estate.

The lender's obviously want us out of the way and consider us a speed bump to making money. "Friction" I believe is the word used from a thread here where an executive went into lender meetings and described what they said and thought of us. They want to do waivers.

I mean....Collateral Underwriter was initially intended as an underwriting tool by Fannie Mae to help mortgage lenders manage risk and identify potential issues with appraisals. However, it evolved into an appraisal valuation tool.

I know we already do pre-listing appraisals. How about being protectors to the buyers?

 

[Mike Ault]

I know we already do pre-listing appraisals. How about being protectors to the buyers?

Have you been harmed by an appraisal waiver? Did you pay a fee to a lender who was supposed to be looking out for your best interests in your mortgage transaction, but failed to? Is your house worth less now than what you paid for it? We can help. Dial 1-800-GSE-FAIL

 

[Bill75]

Have you been harmed by an appraisal waiver? Did you pay a fee to a lender who was supposed to be looking out for your best interests in your mortgage transaction, but failed to? Is your house worth less now than what you paid for it? We can help. Dial 1-800-GSE-FAIL

Yup, NAR is just trying to cover for their agents who are most at risk here. The class actions will be the nail in NAR's coffin.

 

[Tom D]

Interesting. Now that the buyer is paying the agent, does the buyer agent have more fiduciary responsibility to the buyer's welfare.

Something has changed the attitude.

 

[Bill75]

Interesting. Now that the buyer is paying the agent, does the buyer agent have more fiduciary responsibility to the buyer's welfare.

Something has changed the attitude.

You don't really have more or less fiduciary duty, you just have have a fiduciary responsibility to your client regardless. I'm thinking there have been some agents coming back to NAR because their clients that purchased in 20' and 23' are having to refi for reasons and are upset.

 

[OSU Beavers]

I remember one of the questions on my Oregon State Real Estate Salesperson exam from 1991:

The agent has a fiduciary duty to

A) The Buyer
B) The Seller
C) Both or
D) Whoever their Client is

We all know that the real answer is

E) The Deal.

The Agent has a fiduciary duty to The Deal.

A Realtor with a live deal is like a dog with a bone. If you try to take it away from her, then you are going to get bit.

Buyer's agents are still going to push FOMO because they want to get paid sooner rather than later.

 

[George Hatch]

In broker-speak, a question to a broker about whether the transaction went down with/without a "waiver" will probably be interpreted as whether the appraisal contingency in the sales contract was waived. And not to the underwriting of the mortgage itself.