Congress, Please…No More Cash for FNMA Clunkers!
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Congress, cut FNMA loose from conservatorship and let them sink or swim…
Every day I tend to agree more and more that we are facing an uphill battle against corporate America. Then I remember that as a former Marine, I’m supposed to be ‘ok’ with uphill battles. We make do with what we have, not necessarily what we want or need.
Add to this most, if not all of our Congress from both Senate and House. Some isolated exceptions but most either don’t care or encourage the weaknesses in the financial system for their own gain.
There is a reason Congress has such a low approval rating among Americans from both parties and independents. THEY EARNED IT!
Right now, literally in the past week, the financial regulatory system is akin to that partisan political car that was “driven into a ditch.” Yes, Congress hauled it back out and parked it on the side of the hilltop where various self interested parties have been banging and tapping away at it under the pretense of fixing it.
Last week FNMA learned that the car is still insured. So IF it goes in the ditch again they are completely covered!
Immediately after learning that, FNMA decided to announce two new policies:
- Trainees OR ‘unlicensed appraisers’ can now inspect property without supervisors (release the parking brake), even though several states do not allow trainees to inspect property, and some states do not even allow unlicensed individuals to call themselves appraisers. Go ahead and slip that transmission into neutral, will ya? and;
- From now on any loan with a collateral risk (CU) score of 2.5 or lower is exempt from FNMA post purchase audit/default buy back requirements related to collateral. Would ya mind just giving the car a little shove please…just to get it started?
While we have all been screaming to allow qualified trainees to do the unaccompanied inspections, this announcement was premature with no time given to allow states, appraisers or even The Appraisal Foundation (TAF), the Appraisal Standards Board (ASB), or the Appraisal Practices Board (APB) to offer any input. FNMA threw it out there and left the ‘system’ to fend for itself. Right repair technique for the FNMA-appraisal car, but some warning to the guys downhill would have been nice!
As for the 2.5 CU score waivers, what’s the problem FNMA? Not enough loan fraud going on under the current system? You needed to provide direct and significant inducement for loan fraud to be increased dramatically?
Read up on AMCs and their staff that are already telling loan officers HOW to manipulate the appraisal in order to obtain lower CU scores!
Congress, please…no more cash for FNMA clunkers! Cut FNMA loose from conservatorship and let them sink or swim on their own with a new law prohibiting bailing either them or their insurers and reinsurers out for any reason!
Then see if they park the damn thing on a hill with the brake off, out of gear and lean against it!