S 2452, Is this the Governments Answer to Skippy?

[Maverick]

Call your Sentator and let them know your thoughts!

http://www.govtrack.us/congress/billtext.xpd?bill=s110-2452

TITLE IV--GOOD FAITH AND FAIR DEALING IN APPRAISALS

SEC. 129C. DUTIES OF APPRAISERS.

`(2) QUALIFYING BOND- The term `qualifying bond' means a bond equal to not less than 1 percent of the aggregate value of all homes appraised by an appraiser of real property in connection with a home mortgage loan in the calendar year preceding the date of the transaction, with respect to which--

`(A) the bond shall inure first to the benefit of the homeowners who have claims against the appraiser under this title or any other applicable provision of law, and second to the benefit of originating creditors that complied with their duty of good faith and fair dealing in accordance with this title; and

`(B) any assignee or subsequent transferee or trustee shall be a beneficiary of the bond, only if the originating creditor qualified for such treatment.

Despite the threshold in FIRREA an additional question applies. What about "duties" or bonds for all the AVMs, 7ai@ estimates or the like?

The AI estimates the proposed bond requirement could cost appraisers $10,000-$40,000 annually!

Respectfully,

Maverick

 

[Mountain Man]

I don't see it passing, and that's been rolling around in the Senate in one manner or another for a while. But if it did pass, many will drop out of the biz, lenders will freak as they have a hard time finding any qualified appraisers willing and able to continue, turn times will increase, and I see residential fees jumping up close to what we charge for commerical... say starting at $2,200.

 

[Maverick]

S 2452 Is alive and still in Committee

I just contacted Senator Dodd's office confirming S 2452 alive and in committee.

Respectfully,

Maverick

 

[James R]

Wow, combine that with the HVCC and there might not be an residential appraisers left when the dust clears.

 

[Diego Lopez]

Well, if this goes thru, appraisal fees will have to go up, and I don't see how AMC's are going to get anyone to do an appraisal for less than $1000.

I don't see this passing, but who knows.

 

[Diego Lopez]

"`(2) AGENCY ABILITY TO MODIFY TRUE VALUE TOLERANCE LEVEL- If a consumer has a right of action or a defense against the holder of the home loan when the appraisal upon which the home loan was based exceeds the true market value of the home by 10 percent or more, the regulatory agency which oversees appraisers in the jurisdiction in which the collateral is located has the authority to issue rules which permit the 10 percent tolerance level established in this paragraph to deviate by no more than 2 percent where local conditions warrant."


Question: So what happens in a declining market?

I'm coming to the conclusion that residential appraising will no longer be fun or profitable by the time they are done with us. I think it's time to start looking at other business opportunities.

 

[JRS at OBX]

Wow, my base fee will be $5,000 for an appraisal. I'm only going to work two days a week. :Eyecrazy:

That is crazy considering the property I have appraised in the past two weeks adds up to about 12 million.

Maybe I'll quit appraising and start selling bonds!!

It'll never pass.

 

[JRS at OBX]

`(2) QUALIFYING BOND- The term `qualifying bond' means a bond equal to not less than 1 percent of the aggregate value of all homes appraised by an appraiser of real property in connection with a home mortgage loan in the calendar year preceding the date of the transaction, with respect to which--

How would they know the aggregate value? Would it be based on our appraised value?

If a consumer has a right of action or a defense against the holder of the home loan when the appraisal upon which the home loan was based exceeds the true market value of the home by 10 percent or more,

All of a sudden, every appraisal in the nation for a home sale comes in below the contract price. Nobody is able to refinance their house at 80% loan to value since most appraisals are only coming in at 75% of the true market value so that appraisers can reduce their liability and the price of the required bond.

 

[nauthead]

Does this mean Skippy pays a higher bond rate since he inflates values?

 

[Metamorphic]

Sounds like a USPAP violation to me. If the bond is a percentage of the appraised value the appraiser has an incentive to opine lower numbers, or you could say its costs more to appraiser a higher value.

Additionally, if you put a cost on appraisers work of that magnitude you make it REAL easy for BPO/AVM + A mortgage insurance product to crown out all the appraiser's work.