Could the CFPB Eliminate AMCs?
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The Consumer Financial Protection Bureau is seeking public comments on the proposed rules for a Qualified Mortgage. The proposed rules require the lender to season the mortgage for 36 months before they can sell it to Fannie or Freddie. What that means is the lender will own that loan for 3 years.
Fast forward if the new rule goes into effect… The lender will be more conservative, more proactive and scrutinize each and every aspect of the loan package during underwriting. The appraisal will be no different. More questions, more explanations, more scrutiny. Will this be detrimental to appraisal management companies that operate under the fast and cheap mentality? You bet it will! The lenders will not outsource appraisal ordering as they will soon realize exactly how these “independent third parties” operate and the low quality appraisals many passed along to the lender does not protect them. Lenders will demand quality appraisals as they have 100% skin in the game for 3 years. Let’s face it, the appraisal management company will not survive with quality appraisals at a reasonable and fair fee.
As of this writing 12 comments have been received on the the proposed rule. Most are from lenders against the proposed rule. Here is another opportunity appraisers have to voice their opinions. Please do not let this opportunity to improve our profession go by with your voice not being heard. September 8, 2020 is the last day to comment. We encourage each of you to comment on the rules as they could impact our day to day operations.
Read the proposal and place your comments here on or before September 8, 2020.