Kudos to Rep Hensarling!

Michael Ford

Michael Ford

General Certified Real Estate Appraiser at Michael F. Ford Appraisal
Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory
Michael Ford

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Appraisers Knew Fannie Mae Would Need Another BailoutKudos to Congressman Member Jeb Hensarling! House Financial Services Committee Chairman Jeb Hensarling (R-TX) is one of the few federal watchdogs that ‘gets it’ on Fannie Mae’s & all GSE’s operations.

All appraisers that have watched Fannie Mae’s changes in policies over the past 3+ years knew it was only a matter of time before they would need another taxpayer bailout.

What we didn’t know was that it would be this soon. Most of us assumed it would be after the next crash that their reckless policies trigger.

Reading the recent press release from the House Financial Services Committee, my take is that Director Watt simply mislead the Congress and members of the public about the financial strength of Fannie Mae back in 2014. What Fannie Mae leadership’s reasons were for painting a deceptive picture is for Congress to determine.

Representative Hensarling is right. Complete comprehensive overhaul going back to the provisions of FIRREA that allow ‘Evaluations’ as alternative collateral verification methods need to be reconsidered and strengthened.

All hybrid ‘appraisal’ models need to be rejected for the fraudulent processes that they are. We have already seen what is delivered in the marketplace is vastly inferior to what is postulated before federal financial regulatory boards and agencies.

What was the point of federally regulated minimum appraisal standards if they are not going to be uniformly enforced?

The admission that so many “hybrid appraisals” are simply sent to India for completion is evidence that ‘the market’ has no intention or incentive to uphold appraisal integrity. It is exactly that same ‘market’ that taxpayers need to be protected from.

Craigslist advertising for evaluation / hybrid ‘picture takers’ at $10 to $15 per assignment in lieu of a professional appraisers field analysis is another sign that ‘the market’ deliberately seeks to bypass sound, generally accepted appraisal practices as well as prudent lending policies whenever possible. Why shouldn’t it? “The Market” no longer has skin in the game. Everything is either insured or guaranteed by Uncle Sugar directly or indirectly.

Personally, I think the solutions on appraisal issues is to have the Feds take control over all appraisal licensing (as in the NMLS) and enforcement. States have proven they are incapable of it. There are dozens of benefits to doing this, and only a few drawbacks.

I think we can definitively show the benefits outweigh the drawbacks in Feds such as ASC taking over all appraisal regulatory responsibilities.

Fellow appraisers please send your views to Member Hensarling via sarah.rozier@mail.house.gov

Hensarling Criticizes Fannie Mae Bailout Request

WASHINGTON – House Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement harshly criticizing Fannie Mae’s request for bailout funds from Treasury and calling on FHFA Director Mel Watt to stand by his word and immediately suspend payments to the Housing Trust Fund.

“Today’s announcement that Fannie Mae has once again run out of money to pay its own bills is the latest example of why we need to repeal the GSEs’ government charters once and for all. After footing the bill for the costliest bailout in history, taxpayers are sick and tired of getting ripped off by Fannie and Freddie and then scolded by GSE apologists when they complain. Americans deserve better. That’s why Congress can and should enact comprehensive housing finance reform this year to create a sustainable housing system.”

“The even more troubling aspect of the GSEs financial crisis is FHFA Director Mel Watt’s continued insistence to siphon taxpayer dollars to prop up payments to the Housing Trust Fund that the GSEs cannot afford to make. If the GSEs don’t have the money to pay their own bills, they should not be making optional payments to outside entities. That was an essential part of Director Watt’s 2014 unilateral decision to force Fannie and Freddie to make Housing Trust Fund payments. Director Watt personally guaranteed these rules in his 2015 congressional testimony: ‘If we ever have a draw on the Treasury, that would automatically stop the funding of the Housing Trust Fund.’ I call on Director Watt to do his duty, stand by his word, and immediately suspend these payments.”

Background:
Due to the GSEs clear undercapitalized status that led to their placement into conservatorship in 2008, their payments to the Housing Trust Fund were suspended under Section 4567 of the Housing and Economic Recovery Act. However, in his letter of December 11, 2014 to Fannie Mae and Freddie Mac informing the GSEs that he had made a unilateral decision – unsupported by any provision in statute and contrary to prudent safety and soundness regulation – Director Watt stated that FHFA would be “terminating the temporary suspension” of Housing Trust Fund payments “in accordance with the following terms and conditions.” Those conditions, that he himself set, include:

  • Each GSE shall make payments to the Housing Trust Fund “unless during such fiscal year [it] has made a draw from the Department of the Treasury under the terms of the Senior Preferred Stock Purchase Agreement.”
  • If a GSE “has made a draw from the Department of the Treasury under the terms of the [Preferred Stock Purchase Agreement] during [a] fiscal year,” then that GSE “will make no allocation or transfer pursuant to Section 4567(a)(2)(B) for the fiscal year for which the draw was made.”

 

Image credit flickr - jakerome
Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory

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46 Responses

  1. Joy Smith on Facebook Joy Smith on Facebook says:

    Question. Can we share posts with the general public or are they for appraisers only and this blog?

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  2. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    You do understand that because Fannie is not allowed to keep any profits and they are only allowed to pay off the interest from the loans that were taken, they had no choice to take a bailout to pay the extra taxes because of the new tax laws. Had Fannie been allowed to pay off their debt like the rest of the banks, that debt would have been paid for and addl funds given back to the American people.

    If you are going to write and post an article, then post the whole truth, not just cherry pick the info you want to push your agenda.

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    • Your statements are contrary to the facts. Prudent reserves are not profits. They are a part of operating costs.

      Just exactly what were ‘these new tax laws back in 2014?’ To quote your own comment. FNMAs lack of profitability or ability to be self sustaining is related to their own reckless policies – not any regulatory limitations.

      “If you are going to write and post an article, then post the whole truth, not just cherry pick the info you want to push your agenda.”

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    • Hi Brian Coester. I am wondering why you won’t provide comments as yourself? If you believe in what you stand for, why not be honest and use your own name? That’s called telling the truth, the whole truth and not just cherry picking information. You are using this alias across all social media. Hey Mike. Just wanted to give you a shout out for the great job with your posts and glad to have mine shared here as well! Just a favor to ask you and other commenters here. Anytime this troll comments here, please refer to his real name. Thx.

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  3. Jeff says:

    Can you imagine how much it costs just to staff appraisers for the purpose of investigating every appraisal report and to store every appraisals data in the country. That alone is a big fat spending bill right there that can not sustain itself

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  4. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    Lmao, you obviously do not know whar is going on or how much is spent. Hahahah.

    Every appraisal report is not investigated. Servers are cheap these days compared to years ago.

    Once again, someone who has no clue what they are talking about, trying to seem smart

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  5. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    So another moron who does not work for Fannie, has never worked for Fannie, but can add numerous things after his name and thinks he knows what he is talking about. I am done trying to explain to mental midgets about tax law, so I will let CNN do it.

    This site has become a place for washed up appraisers who are 1 reason why the meltdown of 2007 happened, to bitch, gripe and moan about everything.

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    • Please do not attack someone for having an opinion that differs from your own; if you disagree with someone, please express yourself respectfully. Snide or rude comments are not constructive and certainly not helpful. Thank you for your cooperation!

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    • Robert Brett CNN??? Seriously?

      Now THAT’S a source Americans can trust! “Its first infusion in six years”  What was the excuse for its last ‘infusion’? Robert, one does not have to be an overpaid employee of FNMA to understand the rampant mismanagement and bad policies that are rampant there.

      Whatever credibility FNMA may once have had was lost when they created collateral Underwriter; followed by property inspection waivers, followed by hybrids. Each of these were fatal operational flaws but of all of them, CU was the worst. It was built upon a database that FNMA admits was comprised of old appraisals with flawed adjustments.

      “Fannie Mae had only $3 billion in capital on its books. So it needs a $3.7 billion federal cash infusion to cover the paper loss. It’s the first time in six years that Fannie Mae has needed taxpayer cash.”

      Call it a paper loss or not, the FACT is that they are underfunded based on their own operating needs and volume of securities they have to back. Something CNN chooses to ignore.

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    • Betty C. says:

      Nonsense. This is the only unbiased site that there is.

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  6. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    It total, Fannie borrowed 117 Billion, yet has paid back 137 Billion. For you appraiser’s that do not understand simple math, that is 20 billion more.

    Fannie and Freddie or not allowed to pay down their debt. This allows the Feds to control everything.

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    • Not exactly ‘everything’. FNMA has been making their own criminally negligent policies for a very long time even after TARP.

      As for the $20 billion more than was borrowed there is a thing called time-value of money. You may have heard it referred to as interest. Do you think FNMA should get the use of taxpayers money for such a long period without having to pay either interest or some other form of profit sharing with taxpayers?

      As a taxpayer, I can assure you my contribution to them was not a voluntary one. You tell us. What IS the appropriate compensatory return rate for an involuntary taking of taxpayer funds against the wishes and desires of those same taxpayers?

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      • Baggins Baggins says:

        Even more crucial than that, they are the ‘first receivers’ of money. This Robert Brett seems absolutely clueless regarding quantitative easing and how much additional money has been printed within the time frames he mentions. There has been no profit, only loss, only more debt. The fiat printing press was red hot during many of those years.

        Learn. Educate. We are live. Actionable intel received.

        Money is not as simple as linear math. Tune in.

        Having a hard time understanding? We can help. Must watch.

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  7. W. U. Appraiser says:

    Robert, are you a “new generation” appraiser or an AMC troll or AMC CEO ?  Tell us your story?

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  8. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    Mike, I do not care what you think. You continue to have no clue what is actaully going on, but that is typical for people on this site. Face you, you are another washed up Appraiser/realtor and are pissed because your shitty appraisals are finally being called out for what they are.

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  9. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    Unbias? Are you kidding? Hahahaha That has to be the funniest comment I have heard all day.

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    • Pam E. says:

      Lax lending standards, predatory lending, no doc loans, repeal of glass-steagall and implementation of gramm-leach-bliley are the major causes of the meltdown. Appraisers are the scapegoats. I think if it will really the appraisers fault you would see a hell of a lot more disciplinary actions by the states during that time period and shortly thereafter.

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  10. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    I deleted all of my comments and unliked this page. I realized long ago they have no interest in provide real information

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  11. Robert, you never commented or interacted with anyone on our Facebook Page or on the blog. And when you finally did for the first time today, you were disrespectful, rude and were incapable of having a respectful and meaningful discussion. You simply decided to attack others because they had opinions different from your own. We’d be lying if we said, we’re sorry to see you go!

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  12. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    Lmao ok

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  13. koma says:

    Thank you AppraisersBlogs for pointing out important facts for using this website! Let all voice their opinions, but be respectful while doing so. Also, Mr Brett might be a Russian Troll. Went to his fb page and it had no activity from 2012 until 2018.?? I’m just saying. 

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  14. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    No, I just do not allow anyone to see what I post.

    Respectful? Lmao, I have seen the comments by appraisers about things they do not agree with and it is digusting.

    Nice job sucking up Koma

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  15. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    Do you think I am this Brian guy?

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  16. Hi Brian,

    Why are you trolling appraiser forums? Does this help your cause? It shows real disdain for appraisers.

    Jonathan

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  17. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    I thought I was Brian, not Robert

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  18. Baggins Baggins says:

    The primary point of the article is the most important topic point. Finally someone whom could counter amc and lender advocacy is recognizing the seriousness of crushing the licensed appraiser populace and trying to replace them with employee tech programmers, realizing that might not be such a hot idea after all. Trolls? Who cares I say. Call them out, don’t bother with them, whatever. I’ll handle them with the most effective anti troll tools if necessary, memes. As long as you don’t switch to disquss, the problems will be limited. That’s where the majority of bots hang is twitter and disquss. Really, Mr No Name shall not be mentioned here, not by me at least…. Amc managers are neither here nor there to me, except they pose a serious risk to the long term stability of my career and I continue to object. Personally, I don’t care about being anonymous, it’s a necessary evil in a digitized world with apparently permanent shelf life for all data retention these days. Just as long as we don’t resort to name calling…. Everyone deserves a second chance. Especially if they bill for their services separately and don’t take advantage of others.

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    • Well said. But if you look back over the comments on this post, half of them relate to the troll. If readers here don’t recognize this user as a troll, he will egg them on and we get off topic. My suggestion is that the moderator not approve comments made by this specific troll and any new trolls to keep the conversations productive and on point.

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      • Jonathan…that’s the quandary. How to maintain a site by the administrator that unlike other sites does not require submission and review first. I appreciate that the thread went off the tracks many posts ago…and as the guy that wrote it, thats ok. Those that have an interest already read it and offered their meaningful thoughts. Trolls are unavoidable if AB wants to keep her blog a place where all thoughts can be aired. I think she (AB) does a better job than any other site in keeping the Blog relevant and far reaching..

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        • Baggins Baggins says:

          Slaying trolls is half of the entertainment experience. I like it when they get through. As long as they’re not bots, and are still somehow focused on real estate language, that’s good enough for me. It’s an important aspect of news presentation, to allow others looking from the outside in, what kind of nonsense we deal with. Subjective commentary, concealed identities, lack of ethics. Those are just some of the joys related to working with middle management and the appraisers whom for far too long have done better than their seniors, because they’re faster cheaper and sell their services by fee and not quality. Regardless of whom they are, they’re doing it wrong. Your website is awesome by the way, pretty great. I like this site for regular blogging because it tracks strong in google page hits and unlike the appraisers forum, allows unrestricted access to both users and researchers, even the opposition at times. For persons wanting to dive in to investigate or learn about the appraisal industry, I think this site is become more and more important. Per management; under constant attack. Coincidental, probably not. The power of the press, continuing to effect meaningful change. These new trends about ‘approving speech’ have dangerous connotations. I’d rather deal with trolls than shadow banning, censorship, and bots. If comments get enough down votes they become invisible. Cheers.

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  19. David Buckley says:

    Few realize that FIRREA exempts Fannie from USPAP! That should be an easy fix! DGB

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  20. Robert Brett on Facebook Robert Brett on Facebook says:

    Troll Alert: This comment/commenter was flagged as suspicious!

    Who else is exempt from FIRREA?

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  21. David Buckley says:

    JUST FANNIE & FREDDIE.

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    • Baggins Baggins says:

      Exemption from FIRREA = taxpayer bailouts. I’m trying to do the math here. Am I figuring this equation properly? Why would such a powerful consortium of international lender interests be except from any of our stateside rules?

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Kudos to Rep Hensarling!

by Michael Ford time to read: 4 min
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