Several items in the Home Valuation Code of Conduct should be clarified. NAR recommends the following modifications to the Code:
Section I. 1) should include the term "partial payment" and should read "withholding or threatening to withhold a timely payment, [FONT=Times New Roman,Times New Roman]or partial payment[/FONT], for an appraisal report;".
Section V states that any employee of the lender be "appropriately trained and qualified in the area of real estate and appraisals." The word qualified is not defined and does not necessarily mean that the employee must be a licensed appraiser. If the employee is not licensed, then the individual may be operating under the broad scope of "appraiser" without liability to be disciplined while acting like an appraiser. The employee should be licensed and certified by the state in which the property to be appraised is located. The same requirement should hold for employees of appraisal management companies as well.
Section VI states that lenders or affiliates of lenders cannot use an appraisal report obtained by or through an appraisal management company that is owned by the lender or affiliate of the lender and that this prohibition does not apply where the lender has an ownership interest in the appraisal management company of 20 percent or less. Lenders should be prohibited from using an appraisal report from any appraisal management company where the lender or the lender’s affiliate maintains an ownership stake. Allowing lenders to obtain appraisal reports from appraisal management companies where the lender has a stake in ownership does not meet the spirit of this agreement and does not uphold the independence of the appraisal process.
Totally agree with the sections above and below:
There is concern that GSEs will increase their reliance on automated valuation. While this would appear to address appraiser influence in a transparent way, a deeper look at automated valuations generally reveals they are not able to consider qualitative factors with the same level of reliability that professional licensed and certified appraisers produce. Professional appraisal organizations and licensed and certified appraisers should work closely with the GSEs to ensure the highest quality appraisals remain the preferred method of valuation for residential real estate transactions.
and totally disagree with this one:
NAR recommends the Independent Valuation Protection Institute be affiliated with an already existing appraisal organization. This will help to ensure that the code is implemented in such a way that it adds value to the appraisal process rather than becoming a duplicative layer of bureaucracy. If properly implemented the code will compliment, rather than duplicate or contradict, already existing appraisal codes such as the Uniform Standards of Professional Appraisal Practice (USPAP). Further, the Independent Valuation Protection Institute will be better positioned to work in conjunction with appraisal organizations and state regulatory agencies to ensure the independence of appraisers and the integrity of the appraisal process.
Agree with these specifics below:
The agreement signed between the New York State Attorney General and Fannie Mae and Freddie Mac expires in 28 months. The newly created Independent Valuation Protection Institute will be funded by both GSEs for 5 years. The agreement is silent on how the GSEs will operate with respect to appraisals after the agreement expires. There is no indication from any party involved in the negotiations that the agreement will continue after 28 months, if one or both of the GSEs will return to pre-agreement appraisal requirements, or if a third option will be explored. It is also unclear how the Independent Valuation Protection Institute will be funded after 5 years or if more than the $5 million allocated by the GSEs is required to fund its operations.
Of all the written comments from Orgs with vested interests which request/demand Implementation and maintenance of the STATUS QUO, and /or require Congressional Revision of Title XI or NEW Laws - the ONLY Comments/Proposal which addresses the last section - is the INDEPENDENT "IVPI" PROPOSAL which can be implemented under EXISTING Law.
Recommending mandatory affiliation and/or management by "Existing Appraisal Organizations" as the answer belies the fact that many Decision Makers who manage the Risk and Appraisal Selection and Processing Divisions of Major Lenders AND National Settlement Service Providers are Org Members..........who have had the authority to END the Charade .......since 1989 ..........and chose not to..... is IMO ........NO SOLUTION.
Those same Decision Makers, and those at the GSEs, can END THE GAME in 3 months or less without DELAY, and without Congressional Involvement, by implementing the changes in the Home Valuation Code of Conduct before being Forced to.
