TAF Responds to HVCC

[Otis Key]

TAF responds to the HVCC proposal.

 

[Workbox]

Last page, Why do they want to the IVPI to be mediated by an entity that has no idea of appraising? It's an Investors organization!? Hello! http://www.finra.org/index.htm It shows again their true clients/intentions.

The second paragraph of last page truly is telling. What organization is that? I wonder? Where is the transparency?

This just smells.

 

[Bama Bayou]

The Appraisal Foundation's response to the HVCC does not address the real issues and solutions.

This does:

The Alabama Real Estate Appraisers Board, therefore calls for the amendment of the HVCC for the following reasons:

1. The HVCC will likely result in more unreliable appraisals being used by Government Sponsored Enterprises (GSE's) to determine the value of collateral for mortgage loans.

2. The HVCC has no authority to penalize those individuals who attempt to improperly influence appraisers.

3. The HVCC does nothing to criminalize the improper influence of appraisers or the appraisal process.

4. The HVCC could undermine legitimate, ongoing efforts in Congress to pass meaningful legislation, which would criminalize the improper influence of appraisers.

5. The HVCC gives shareholders in Fannie Mae and Freddie Mac false hope that collateral for mortgages is being properly valuated.

6. The HVCC gives U.S. taxpayers a false sense of security that its GSE's have taken all meaningful steps to address valuation concerns related to the current mortgage meltdown.

7. The HVCC gives individuals taking out a conventional mortgage a false sense of security that their house is being properly appraised.


The Alabama Real Estate Appraisers Board believes the following alternatives should be explored, promoted and implemented before resorting to the extreme measures outlined in Section IV of the HVCC:

1. State and Federal legislation should be enacted to criminalize the improper influence of appraisers, including stiff penalties.

2. Mortgage professionals should be licensed and/or certified.

3. Mortgage professionals should sign a certification that they did not influence the appraisal process in any way. This certification would hold mortgage professionals civilly and criminally responsible. The certification SHOULD be included as a provision in the HVCC as well as in legislation with penalties for individual offenders.

4. Enact State and Federal law requiring originators/processors ordering appraisals to deliver a copy of ALL appraisals developed at the lender's request to the borrower, the underwriter and/or the lender.

5. Allow mortgage originators or borrowers to pick an appraiser from a list of previously approved appraisers, as the commercial banks currently do.

 

[Mike Boyd]

and/or the lender.

5. Allow mortgage originators or borrowers to pick an appraiser from a list of previously approved appraisers, as the commercial banks currently do.[/QUOTE]

So, you support (B) 5 that allows mortgage originators to keep their "pet" appraisers?
It seems to me that this will defeat the purpose of the entire concept. Appraisers should be selected on a rotational basis from the National Registry. That way, everybody gets a fair shot. Fees should be national and published in order to defeat the "cheaper is better"
concept that now exists with AMCs.

Other than that, I think the Alabama revision is good. Did they send that to TAF?

 

[Marcia Langley]

In underwriting a loan, unless appropriate controls are in place to ensure appraiser
independence, the lender shall not utilize any appraisal report prepared by an appraiser employed
by:
(1) the lender;
(2) an affiliate of the lender;
(3) an entity that is owned, in whole or in part, by the lender;
(4) an entity that owns, in whole or in part, the lender
(5) a real estate “settlement services” provider, as that term is defined in the Real Estate
Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;

(6) an entity that is owned, in whole or in part, by a “settlement services” provider.

​

​

They pulled the teeth right out of that.​

 

[Elliott]

I thought TAF might start out....

"How dare you suggest that you know how to run the appraisal profession.
We've been writing USPAP for the last 15 years and its quite a document.
Appraisers fear us (cause we made it difficult to understand, then we
supplement it with ASB opine which really confuses them). We have always
maintained that we will make sure there are more than enough appraisers
to serve the lending industry. This has promoted lower fees for AMCs and
lenders, and also led to a group of very accomodating appraisers, affectionally
called Skippy's because they are so agreeable. We feel today's appraisal
is a great value to the lending industry. We are supporting AMCs who have
set the maximum fee for a 1004 at $140, more than 75% less than they
were 10 years ago. We think we've given the consumer real value.

We just think this HVCC thing is just wrong headed. TAF and state boards will
continue to maintain their dominance over the industry and will always
promote lender's interests first. If this appraisal 'independence' thing is
eventually accomplished, we will make those changes to USPAP that makes
appraiser kowtow to lenders in the future.

Following is 10 pages of stuff our lawyers and the lending industry wrote.

Sincerely,
TAF

 

[Bama Bayou]

and/or the lender.

5. Allow mortgage originators or borrowers to pick an appraiser from a list of previously approved appraisers, as the commercial banks currently do.

So, you support (B) 5 that allows mortgage originators to keep their "pet" appraisers?
It seems to me that this will defeat the purpose of the entire concept. Appraisers should be selected on a rotational basis from the National Registry. That way, everybody gets a fair shot. Fees should be national and published in order to defeat the "cheaper is better"
concept that now exists with AMCs.

Other than that, I think the Alabama revision is good. Did they send that to TAF?

The letter was addressed to Troy King, state atty general, asking him not to enter any such agreement with Cuomo or the GSE's.

I support letting the lender (not the broker, big difference), who is betting their own money, select the appraisers. I think that a rotation from a national registry at set fees would be unconstitutional. Appraiser and lender regulations should encourage high quality and punish, mainly financially, those who encourage junk (fast & cheap).

I don't think 5 would be much of a problem if number 3, which is the most important recomendation, was implemented. The GSEs could implement this Monday morning if they wanted to. And they should.

3. Mortgage professionals should sign a certification that they did not influence the appraisal process in any way. This certification would hold mortgage professionals civilly and criminally responsible. The certification SHOULD be included as a provision in the HVCC as well as in legislation with penalties for individual offenders.

 

[xmtpedprl]

I've been 'auditing' nearly every client I have falling into the category of 'lender' (as opposed to REO, personal, litigation, fraud, etc...), and asking them basically (abbreviated here) the following:

"What do you think of the efforts to straighten out the mess between LOs/lenders and appraisers, and what do you think *would* work?"

So far most are still unaware of what is going on, those who are think nothing will happen, and to a person, every one of them, has confessed that the potential for the loss of money (being fined) would motivate them to play it straight. However, they're not worried about *that*, either.

All that has to be done is begin to fine them, I've been saying it for years, and I can't for the life of me figure out why no one will implement such a program of progressive fines per attempt leading up to loss of brokerage (or other) license.

It would solve all our problems, as then they'd look for the best appraisers rather than the sleaziest, AMCs would disappear (most of them, anyway) and we would then compete purely on merit, performance and production, the way it should be.

Anything short/other of/than that is/will be half measures and anti-capitalistic in nature.

Dave...

 

[c w d]

Elliot, I need to correct your TAF statement. There is some misrepresentation there.

You said:

Following is 10 pages of stuff our lawyers and the lending industry wrote.

Sincerely,
TAF

When you should have said:

Following is 10 pages of stuff our lawyers from the lending industry wrote.

Sincerely,
TAF

 

[Restrain]

I've been talking with my realtor friends since this has started. Most profess that they had no idea (sure they didn't) that multiple appraisals are ordered, only the one that makes the deal work is paid for, that lenders pressure appraisers.

Ostrichs. So is the TAF.

It's so tied up in its own USPAP bow that the members have forgotten what it's actually like to appraise.