TAF Responds to HVCC

[Workbox]

GH, Buy bringing up the Mission Statement and then compare it to what has happened in the past 10 years. Paranoia is not the word, I think the word "WHY"? Should be the word.

They made there bed, now they can't find it.

 

[Marcia Langley]

I also think the TAF has gone outside their mission.

Most of what they say is fine. But aside from the IVPI, the biggest controversy generated by the HVCC is the controversy over who can select/order appraisals. That's the very heart of all the appraiser independence issues, so naturally a concern of the TAF, right?

What they don't comment on is as important as what they do comment on.

I am amazed that they should weigh in in the manner that they did to pull the teeth out of any restrictions that would hinder AMCs' ability to coerce appraisers but bless by their silence the elimination of brokers' ability to order GSE appraisals.

The reasoning they gave for easing up on AMCs and bank employees was the lack of evidence of any wrongdoing. Which implies (by their silence) they believe such evidence does exist for brokers.

Their claim that no evidence exists for abuses of appraiser independence by AMCs is exactly the reasoning used by all of the other industry stakeholders who have a bias towards protecting the commercial interests of AMCs (like TAVMA for example) while gleefully squelching those of brokers.

I feel like it is blatant bias based on commercial considerations and not on true concern for reducing appraiser coercion. They are advocating the same sort of vague milquetoast language we already have that leaves the foxes in charge.

And that's not even getting to their comments regarding the IVPI. I'll only say they seem awfully concerned about how the IVPI can make a profit.

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It's true that whatever the TAF did in regard to commenting on the HVCC would draw fire, even if they had done nothing. I'm sure they considered that very carefully as they prepared their comments. That they released such an obviously controversial opinion indicates that they believe the stakes are very high.

 

[Fred]

What they don't comment on is as important as what they do comment on.

See that George?

I feel like it is blatant bias based on commercial considerations and not on true concern for reducing appraiser coercion. They are advocating the same sort of vague milquetoast language we already have that leaves the foxes in charge.

It could be worse. They could have said the bulwark protecting appraiser independence is appraiser inegrity, and if appraisers would do their job by just saying no to coercion, none of these additional redundant mechanisms would be necessary. That would have really livened up the discussions.

 

[Marcia Langley]

It could be worse. They could have said the bulwark protecting appraiser independence is appraiser inegrity, and if appraisers would do their job by just saying no to coercion, none of these additional redundant mechanisms would be necessary.

I think they sort of did say that when they claimed no evidence for AMC coercion; it must be the appraisers' fault. Especially the appraisers who accept assignments from brokers.

I agree it could have been worse. But it's bad enough.

 

[Fred]

I think they sort of did say that when they claimed no evidence for AMC coercion;

I didn’t see where TAF said there was no evidence of AMC coercion.

I haven't really spoke out on these issues other than to take the occaisional jab and at something I saw as ill-considered tomfoolery. However, I think at the core the problem is too many intermediaries (middle-men). Fannie is a player and she wants appraisals, but she doesn't want to deal with appraisers directly, but rather she wants to delegate that to the banks. The whole mortgage racket is a passthrough game where the ultimate risk-takers are not dealing with th only independent party in the transactions. The solution to too many bureaucracies, is not more bureacracies.

 

[DWiley]

Does anyone have a list of those 110 organizations that are affiliated with TAF

The "lists" are posted on the TAF website.

Is TAF outside its mission by responding? Are state boards outside their missions by responding? Whatever the answer is, I think it would be the same for both groups.

I personally don't see the harm in any appraisal-related entity providing feedback on a policy that will affect so many appraisers.

whatever the TAF did in regard to commenting on the HVCC would draw fire, even if they had done nothing.

Truer words have never been been spoken.

 

[PropertyEconomics]

And that's not even getting to their comments regarding the IVPI. I'll only say they seem awfully concerned about how the IVPI can make a profit.

Understand that they have no understanding or care about the IVPI as proposed by Dodd/Crowley. The AF position is obviously much different regarding the IVPI which was most probably the intent of Cuomo in the first place. I am sure neither his nor their vision of IVPI is the same as has been discussed here at great length.
The IVPI, being an independent arm of the HVCC, would most probably be required to pay for itself and not be a further drain on the larger HVCC. It is purely a business model in which each component is required to pay for itself.

 

[Marcia Langley]

OK, I agree my comment was imprecise, overly broad, even ill founded.

Let me see if I can do better.

Item VI

This provision would prohibit certain parties, including a staff appraiser working directly for a
lender, from performing an initial appraisal. We are unaware of any evidence suggesting that an
appraiser working directly for a lender is any less independent than a fee appraiser. In fact, from
a historical perspective, appraisers working directly for lenders have had a stigma that they are
more “conservative” than fee appraisers. It is our belief that a staff appraiser working directly for
a lender that maintains proper controls and firewalls, is entirely capable of remaining
independent, impartial, and objective, and performing assignments without bias. Such controls
could include ensuring that staff appraisers report to the lender’s risk management personnel, as
opposed to loan production personnel. Suggested rewording (proposed new text is underlined) is
as follows:

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.
The lender also shall not use any appraisal report obtained by or through an appraisal
management company that is owned by the lender or an affiliate of the lender, provided that the
foregoing prohibitions do not apply where the lender has an ownership interest in the appraisal
management company of 20% or less and where (i) the lender has no involvement in the day-today
business operations of the appraisal management company, (ii) the appraisal management
company is operated independently, and (iii) the lender plays no role in the selection of
individual appraisers or any panel of approved appraisers used by the appraisal management
company.
Notwithstanding these prohibitions, the lender may use in-house staff appraisers to (i) order
appraisals, (ii) conduct appraisal reviews or other quality control, whether pre-funding or postfunding,
(iii) develop, deploy, or use internal automated valuation models, or (iv) prepare
appraisals in connection with transactions other than mortgage origination transactions (e.g.

loan workouts).

​

​

​

Certain parties, including a staff appraiser working directly for a lender,

"Including" but not limited to.

"Certain parties" would also include the AMCs that are owned by lenders.

They go on to speak spcifically about staff appraisers working directly for a lender:​

We are unaware of any evidence suggesting that an

appraiser working directly for a lender is any less independent than a fee appraiser.

​

​

The HVCC treats certain AMCs equally with staff appraisers working directly for the lender as described in the enumerated items in the quote. The implication is that appraisers inside the bank and inside AMCs owned by lenders, etc, are subject to the same influences from the lenders' production side and are all at least in some ways considered "employees" of the bank. The "settlement services" items don't even relate to "employees of the bank" at all.

The TAF, after setting up their reasoning of "unaware of any evidence" in regards to "an appraiser working directly for a lender" goes on to apply that reasoning and their proposed fix for it to all of the six items, whether they are employees of the bank or not.

At best, it is flawed logic, at worst it is sneaky.​

 

[Elliott]

Fredrick said, Pressure comes in so many different ways and it is rarely easily documented.

At the end of the day, appraisers aren't lawyers, Fannie Mae, or the FBI but
if you ever tried to overtly or mildly influence how they did their job you
would probably soon find yourself in front of a judge.

Appraisers know they are being pressured, we know the games that are
being played to block us out of providing honest, straight forward opinions.
Everyone will get their fingers in this pie at some point and we'll be left
with something. If we move a little more toward independence, less
pressure, a more 'honest' system of selecting appraisers, it will be a phoenominal
success.

 

[George Hatch]

I don't have a problem with TAF commenting on the HVCC so long as their comments are about appraiser qualifications and appraisal standards. Advocating for appraiser independence and accountability is 100% fine by me.

I'm just not comfortable with them taking a swing at the state boards or getting involved with banking regulations, even if those comments are otherwise reasonable. All it can do is detract from their existing relationships with all the boards and the other parties involved. Not that my comfort level has anything to do with anything.

There are politics involved, and payback is a *****.