Tagged: RESPA

Suppression of Appraisal Service Free Trade & Fair Price Competition 23

Restraint of Trade Investigation

I am heartened that the Federal Trade Commission has recognized the need to assure that appraisal “…consumers deserve to benefit from a free market where those fees are set by competition.” It appears that your complaint may have been instigated by the very special interests that are most responsible for suppression of appraisal service free trade and fair price competition in America today. By that I am referring to the entities broadly described as Appraisal Management Companies (AMCs), and in this specific complaint – the Federal National Mortgage Association, also known as Fannie Mae and/or FNMA .

AMC Dangers: Appraisal Management Companies (AMC) are changing how our profession works 4

AMC Dangers to the Consumer

Appraisal Management Companies (AMC) are changing how our profession works. It’s important to know exactly how they are affecting the real estate process, especially if you are a home-owner, looking for real estate or are involved in another part of the property. Who does an Appraiser work for? An appraiser works for “The Client” named in the report who ultimately responsible for the appraiser’s compensation. It is important to realize that while a borrower may have paid a lender or third party the cost of the appraisal, “The client” remains the only party authorized to use the report. The appraiser...

Court Won’t Unseal Files on Washington Mutual Appraisal Scheme 0

Court Won’t Unseal Files on Washington Mutual Appraisal Scheme

A federal judge said he will not unseal files related to an alleged appraisal rigging scheme that Washington Mutual launched in an effort to favor mortgage lenders just before the 2008 market crash, Courthouse News Service reported Dec. 3. The case involves a federal class action suit launched in 2008 in San Jose, California, by Felton Spears Jr. and Sidney Sholl who claimed that Washington Mutual, Lender’s Service Inc. and appraisal management firm First American eAppraiseIT colluded in 2006 to create inflated mortgage-loan appraisals that allowed the bank to sell aggregated security interests in the properties at inflated prices. At...

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Appraisal Management Company Sued in Consumer Class Action Complaint

A consumer class action complaint has been filed against a lender and its AMC relating to the subject matter of a prior CFPB investigation and settlement. Last August, the Consumer Financial Protection Bureau (CFPB) announced that it had taken action against Amerisave Mortgage Corporation, its affiliated AMC Novo Appraisal Management Company, and one of the owners of both companies Patrick Markert. Part of the CFPB’s action concerned alleged overcharging for appraisal services by the AMC and failure to disclose the AMC’s affiliation with the lender. Under a consent order, Amerisave and Novo agreed to pay $14.8 million in refunds to consumers and a $4.5 million...

HUD blacklisting - guilty until proven innocent 2

HUD Blacklisting: Guilty Until Proven Innocent

HUD has been quietly blacklisting appraisers for years without due process Being on HUD’s FHA Appraiser Panel and performing FHA appraisals is an essential source of work for many appraisers. However, according to a recent legal brief filed by the National Association of Appraisers (NAA), HUD has been quietly blacklisting appraisers for years without due process. At the center of the case against HUD (U.S. Department of Housing and Urban Development) is Ken Taggart, an appraiser in Penn., who was removed from HUD’s roster in January 2010. Taggart says that his mortgage servicer, GMAC Mortgage, LLC, mistakenly forclosed on his...

AMC Rules Inconsistent with Congressional Intent - Banking Agencies 2

Agencies AMC Rules Lack Guidance

Banking Agencies are Told Proposed AMC Rules Fall Short on Guidance In comments filed June 6 with several federal banking agencies, the American Society of Appraisers (ASA) and the National Association of Independent Fee Appraisers expressed our concerns that rules proposed to regulate appraisal management company (AMC) conduct lack sufficient detail to allow for effective implementation. Additionally, the organizations expressed concern that some provisions of the proposed rule depart from Congress’s intent when the enabling law was included in the Dodd-Frank Act, and could negatively affect the overall public policy goals. In the comment letter, ASA and NAIFA cover numerous...

Where Did All the Good Appraisers Go - Imagecredit Flickr - gerlos 5

Where Did All the Good Appraisers Go?

The good appraisers are leaving mortgage appraising as fast as they can. Thus far the housing industry has been applying “Band-Aid” solutions to the bigger real estate crisis. There are several problems going on at the same time, all contributing to the big picture, which is bleak to say the least. One true crisis in the real estate industry is an “information crisis.” This information problem, trickles down to appraisals, lenders, and ultimately, mortgage investors. Standardization, national guidelines, and disclosures are the only way back from this nightmare (i.e. the RESPA disclosure. One fee on the good faith estimate for...

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Mortgage Disclosure Rule Alters Appraisal Fee Reporting

The Appraisal Institute on Dec. 17 finalized its review of the Consumer Financial Protection Bureau’s 1,888-page final rule on Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act and the Truth in Lending Act, and noted several provisions that impact real estate appraisers and how appraisal fees are reported. The rule, which takes effect Aug. 1, 2015, mandates the use of two new disclosure forms, the Loan Estimate (which replaces both the Good Faith Estimate and the initial Truth in Lending Disclosure) and the Closing Disclosure (which replaces both the HUD-1 and the final Truth in Lending Disclosure). It...

Lenders May Still Profit Most from Appraisal Fees 2

ASFMRA/AI Support Disclosure of AMC Fees

With the Consumer Financial Protection Bureau (“CFPB”) up and running, there are numerous regulatory issues still pending relating to the Dodd-Frank Act. The regulatory issues include appraisal independence rules, AMC fee disclosure, AMC registration, required physical property visit by appraisers in “higher risk” mortgages, HUD-1/RESPA Consumer Disclosure, and asset backed securities. Of particular note, the CFPB has proposed a new Consumer Disclosure form that is intended to replace the HUD-1 settlement statement. The proposed rule which was release for public until November, allows disclosure of appraisal management company fees, but does not require it. As a result, some lenders, particularly...

NAIHP Exposes AMC Tax Evasion / RESPA Violations 1

NAIHP Exposes AMC Tax Evasion / RESPA Violations

AMCs violating RESPA NAIHP recently discovered many Appraisal Management Companies (AMC’s), are operating without authority in most states and have failed to pay state income tax. When businesses are formed, they are required to register with their Secretary of State, for authority to conduct business. That registration alerts the State Tax Department you exist and may be responsible for certain taxes. The same holds true if you operate outside your home state, according to Marc Savitt, NAIHP President. “Most AMC’s are only registered in a handful of states, but operate nationwide. If you’re not registered, you’re not paying taxes,” said...

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