FDIC Says NO to Appraisals
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The FDIC voted to increase the minimum appraisal threshold to $400,000 for residential appraisals, despite the overwhelming opposition. The vote was quietly supported by the Consumer Financial Protection Bureau (CFPB). Maxine Waters and The Appraisal Foundation condemn the actions of the FDIC.
See The Appraisal Foundations response below.
(Washington, DC) August 20, 2019 – The Appraisal Foundation President David Bunton issued the following statement after the final rule exempting residential real estate transaction of $400,000 or less from appraisal requirements was approved by the Federal Deposit Insurance Corporation.
“When the proposed rule was announced in November 2018, The Appraisal Foundation sent a letter strongly encouraging the FDIC to not adopt any action. Since November, our position has only hardened. The Appraisal Foundation believes that increasing the appraisal threshold level will negatively affect safety and soundness in real estate lending practices. It will likely prompt many financial institutions to significantly reduce attention to collateral risk management. This position is supported by the Government Accountability Office (GAO) report from January 2012, where no support was found to raise the current threshold amount. In fact, that GAO report reflected stakeholder support to reduce or eliminate the current threshold. The past nine months has proven the findings of the GAO report were with merit as the wide spread opposition to the proposed rule significantly outweighed support for the rule.
“It is sad that we are celebrating the 30th anniversary of Title XI of Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) this month, which was created to protect the deposit insurance fund, yet this is also the same month when another major exemption is finalized, which continues to hollow out the teeth of FIRREA.
“The Appraisal Foundation remains steadfast in its belief that an appraisal performed by a licensed or certified appraiser that complies with the Uniform Standards of Professional Appraisal Practice is a lynchpin in the proper evaluation of real estate collateral.”
The FDIC also voted to reduce the protections under the Volcker Rule. See Maxine Waters Public statement condemning their “senseless” actions below:
“The Volcker Rule is a cornerstone of Wall Street reform that Congress passed in the wake of the 2008 financial crisis to prevent federally-insured, deposit-taking banks from engaging in risky, speculative activities, like owning hedge funds and private equity funds, on the backs of the American taxpayers. I am deeply concerned by today’s FDIC and OCC actions, and potential additional votes by other regulators, to weaken this critically important rule.
“Doing so will not only put the U.S. economy at risk of another devastating financial crisis, but it could potentially leave taxpayers at risk of having to once again foot the bill for unnecessary and burdensome bank bailouts. The final rule published today would curtail prohibitions in a manner that Congress never intended and allow Wall Street megabanks to gamble with the same types of risky loan securitizations that turned toxic in 2008, at a time when these risky products are once again on the rise. These actions are clearly intended to carry out the reckless deregulatory agenda of President Trump and his Administration.
“I call on the FDIC, OCC, and other regulators to reconsider this senseless decision, especially given the significant changes made from the initial proposal, and take the time to give the public a full and fair chance to comment.” Read more »
Watch Brian Stevens video on the subject: FDIC says no to appraisals?
Rob Chrisman Reports Appraiser Connections Closes it Doors.
It is with great sadness that I must inform everyone that effective immediately Appraiser Connections is shutting down. All orders in the system will be complete, just no new orders. Retail loan officers will be given new user IDs for the new AMC that will be taking over and for Wholesale LOs, just make sure you select a different AMC. Thank you all very much for your years of support and business. Kathleen and I will miss you all very much.
This is all the information we have at this time. VaCAP will keep you posted, but encourages everyone to watch their receivables.