FNMA Property Data Collectors Program Violates WV Law
The Fannie Mae Property Data Collectors program seems to have run afoul of West Virginia law. This program allows for the collection of data related to real estate appraisals by unlicensed third-party data collectors, which is in direct violation of article 38 of the state’s Real Estate Appraiser Licensing and Certification Act. The act specifically states that only a casual or drive-by inspection can be performed when it comes to consumer loans secured by real estate, and no opinion can be rendered as to its value nor any fee charged for such an inspection.
ARTICLE 38. THE REAL ESTATE APPRAISER LICENSING AND CERTIFICATION ACT.
§30-38-1. Real estate appraiser license required; exceptions.
(a) It is unlawful for any person, for compensation or valuable consideration, to prepare a valuation appraisal or a valuation appraisal report relating to real estate or real property in this state without first being licensed or certified as provided in this article. This section shall not be construed to apply to persons who do not render significant professional assistance in arriving at a real estate appraisal analysis, opinion or conclusion. Nothing in this article may be construed to prohibit any person who is licensed to practice in this state under any other law from engaging in the practice for which he or she is licensed.
(b) No person other than a person licensed or certified under this article may use the title of licensed appraiser or certified appraiser or any title, designation or abbreviation likely to create the impression that the person is licensed or certified by the state.
(c) This article does not apply to:
(1) A real estate broker or salesperson licensed by this state who, in the ordinary course of his or her business, gives an opinion to a potential seller or third party as to the recommended listing price of real estate or an opinion to a potential purchaser or third party as to the recommended purchase price of real estate, when this opinion as to the listing price or the purchase price is not to be referred to as an appraisal, no opinion is rendered as to the value of the real estate and no fee is charged;
(2) A casual or drive-by inspection of real estate in connection with a consumer loan secured by the real estate, when the inspection is not referred to as an appraisal, no opinion is rendered as to the value of the real estate and no fee is charged for the inspection;
Fannie Mae has put itself in a difficult position here due to its negligence towards following state laws governing appraisal activities – something that should have been taken into account prior launching this initiative across multiple states with varying regulations on such matters. Not only does this create potential legal issues for Fannie Mae but also puts borrowers at risk if inaccurate information is collected from their properties due to the lack of qualified personnel performing these inspections under applicable laws and standards set forth by individual states like West Virginia.
It’s important that companies operating within different jurisdictions are aware about local regulation before engaging in business activities – especially those involving sensitive areas like property valuation – as not doing so could lead them down an expensive road filled with fines, penalties or even criminal prosecution depending on severity level breach committed against given statute.
Fannie Mae should take steps immediately to ensure that its Property Data Collectors are compliant with all relevant state laws if they wish to continue offering this service without facing legal repercussions.
While other states may have similar statutes governing appraisals, it is important for all appraisers to familiarize themselves with their own regulations before engaging in any appraisal activity so they do not run afoul of local laws. If you know of similar statutes in other states, please comment below.
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From FNMA today
Full-Service Providers
Offer lenders property data collection order fulfillment
Asteroom
Accurate Group, LLC
Class Valuation
Clear Capital
Mueller Services, Inc.
Solidifi
Service Link
Valuation Connect
REVAA.org starting lineup… Professional lobbyists on board practically living in the FNMA offices in DC.
http://revaa.org/about/#introducing
I have never seen more laughable and false Mission statement as theirs. We should get Jeremy to investigate how much money they have poured into slimy bureaucrats wallets. Everyone on the panel is a AMC. They are the Talk big about AIR and Get appraisers Paid, -but Do Nothing money changer snakes and to say otherwise is a gut buster Hoot!
Could not be more transparently biased against regular consumers, leaning instead towards a pro corporations stance if they tried. They did try actually, which is why the GSE managers biased intentions is so painfully obvious. Audit time.
B S!!!!
Still going to need someone in WV to care enough to challenge Fannie Mae
It may violate Virginia law as well. I intend to push the issue at the June Board meeting
How does that stack up with Maine law?
§14003. License required
Except as provided in section 14004, it is unlawful for a person to prepare, for a fee or other valuable consideration, an appraisal or appraisal report relating to real estate or real property in this State without first obtaining a real estate appraisal license. Only an individual may be licensed under this chapter. This section does not apply to individuals who do not render significant professional assistance in arriving at a real estate appraisal analysis, opinion or conclusion. Nothing in this chapter prohibits any person who is licensed to practice in this State under any other law from engaging in the practice for which that person is licensed. [PL 2007, c. 402, Pt. GG, §1 (AMD).]
It probably violates several State’s laws; I hope someone in NY is smart enough and/or cares to challenge this but I doubt it. FannieMae is still touting how the appraiser plays an important role in the mortgage industry, what BS. Having the buyer of loans, who makes their profits ONLY from the purchase and sale of loans making the rules about how a property is valued is like the fox guarding the hen house. Realtors are also to blame for this too as they were lobbying intensely against appraiser as we kill deals, are costing the homeowner too much money and hold up closings. It’s another sh*t storm in the making all over again, someone a long time ago said every 15 years there is a mortgage crisis; I think this action by FannieMae qualifies as such.
I predict this won’t last 6 months.
If they espouse there is a shortage of appraisers?
Where are the DCs gonna come from?
FHFA pushing extra fees for well qualified borrowers. aka; subsidy tax. Policy makers at GSE’s are clearly beyond a doubt incompetent. Look at the matrix tables, it’s a nightmare. Penalty rates for being financially responsible. The better your ltv position is, the higher your points penalty. These people need to go, appraisal is not the only thing they’re restructuring.
https://www.zerohedge.com/personal-finance/biden-punish-good-credit-homebuyers-subsidize-high-risk-mortgages
https://nypost.com/2023/04/16/how-the-us-is-subsidizing-high-risk-homebuyers-at-the-cost-of-those-with-good-credit/
https://web.archive.org/web/20240213001450/https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Updates-to-Enterprises-SF-Pricing-Framework.aspx
https://singlefamily.fanniemae.com/media/9391/display
Will review the state law in response to this article soon. Thank you.
DC is out of control. Time to Drain the Swamp before they take the country to Venezuela!!!
Real Property Inspectors do not render Significant Real Property Appraisal assistance
The hell they don’t!!!
Andrew, Interesting. Does working performance under your states definition of the term; ‘Real property inspector’ require a license in your state? Otherwise someone whom is acting like a real property inspector, but without a license, could be said to be providing significant assistance to the appraiser, because they do not fall under that protected category of real property inspectors?
It’s a totally different animal anyways, an obvious circumvention of the spirit of the regulatory intent. Everyone knows that an appraiser works independently of a licensed home inspector. Two different check and balance points for consumer benefit and lender benefit. Suddenly though, the appraiser does rely on the inspector, via FNMA decree, no other options available. The previous regulatory guidance is no longer applicable. Except if the ‘inspector’ would still require licensing. At which time regulatory guidance needs to be reconsidered.
Cheap bureaucratic work arounds to bypass regulatory intent. Restructuring the lending apparatus outside of congressional intent and approval. People you can trust! Equity!
Well you have made a good point about Home Inspectors. In NC our Home Inspectors are licensed by the NC Department of Insurance. The Department of Insurance has conveyed to NC RE Appraisers to be careful how they describe condition of a SFR. i.e Mechanicals etc. So Property Data Collector could indeed find themselves in hot water with our Department of Insurance.
Asteroom who?
https://www.f6s.com/company/asteroom#about
https://wellfound.com/company/asteroom
3d doll houses? Tech startup? 1.5m in a single round of seed funding? 11-50 person company?
https://www.crunchbase.com/organization/asteroom/company_financials
https://www.trustpilot.com/review/asteroom.com
https://www.indeed.com/jobs?q=Asteroom&l=&vjk=e3e4a4b94663f523
‘I signed up to be a scanner with Asteroom. The representative and their marketing ad stated that each assignment would pay no less than $75. I have the original advertisement just in case the information is changed. / However, when I started receiving assignments, many of them actually start at $60. / Also, I was told that assignments would be delivered to my email. But they never told me that I would be competing with other scanners for the same assignments. / ‘
Have to be a licensed realty agent. How does that fit into home inspection requirements? These are tools for realty agents, marketing gimmicks. Adopted by some of the biggest realty firms in this country (Berkshire). The company states it’s pricing scale is $325 dollars for a 2,000 sq ft home photo session. With add on’s $20 per photo. Oh that’s no problem. Paying an appraiser, well, it’s simply too expensive for the consumer. GSE people are busy handing out special favors to tech firms and unnecessary middle management companies. Tens of thousands of lifetime career appraisers, replaced by a handful of tech people from facebook who developed ‘a new app’. They’ll give all the work to 1 year sales agents. Unbelievable. Shockingly incompetent decisions by FNMA.
https://www.asteroom.com/en/captureservice
Correction, both appraiser and agent photographer get downgrade pay scale. Now the sales agent is the home inspector whom the appraiser relies on. Ridiculous.
Check out their amc page;
https://www.asteroom.com/en/hybrid-appraisal-data-collection
Scroll down to look at their appraisal samples.
https://cdn.asteroom.com/pdf/report/sample_pdr.pdf
WTF is that? It’s certainly not an appraisal. Totally inadequate.
Please please contact me and send me that information. Thank you
Hi Pat, I just looked at this company for the first time, and posted most of the research links. There were a few other routine business related like working with Berkshire and landed clients this and that, not really worthy of posting. You know what I know. For the one statement above, that’s actually a copy from a reviewer on an employment site, I used the single quote marks to denote it was not my statement. If anyone knows how to research where seed start up money comes from, from within those networks, that would be illuminating. Bet you 10 rabbit skins and a case of bud light beer that an amc was involved with their seed start up.
I bet you’re right
Colorado currently does not regulate home inspectors. Tried to pass a bill in 2017 & 2019 both failed.
One does have to be licensed to perform radon inspections.
https://scotthomeinspection.com/dora-recommends-do-not-regulate-home-inspectors-in-colorado/
https://scotthomeinspection.com/wp-content/uploads/2019/10/2019HomeInspectorsSunrise.pdf
Per CO DORA report linked in this second article; (second link above)
‘Unlicensed home inspectors ultimately judge and certify the quality of work product of licensed trade professionals. The work product of home inspectors dramatically impacts consumers, as well as licensed mortgage originators, real estate licensees, appraisers and settlement service providers. Home inspectors are the only entity in the real estate transaction settlement process that are not subject to licensure, testing standards and continuing education and training requirements.’
Pdf pg 14 from above second link has a convenient list of which states require home inspectors licensing, and which do not.
CO Realty regulations;
https://drive.google.com/file/d/1osD-YuhWqubkoL514sQKKph8uUWOMi6T/view
pdf pg 1-23. Realty agents would be defined as providing ‘settlement service’ related activity as defined in VII – XI.
However it is unclear if omission of data or some other inadequate ‘inspection service’ may be a violation of 12-10-217 on pg i-18 regarding; knowingly misrepresenting or knowingly misinterpreting.
This is what I’ve been on about with appraisal management companies for the past decade; they came after the fact, after all this other regulation was reset, re written, and put in place on local and the federal levels. The amc’s are mostly unregulated and consistently expand their scope of service to include activity which other entities are regulated regarding, but such regulation does not apply to the amc. Yet the amc oversees a substantial portion of the process, applies pressure, influences results, steers vendor success or failure which greatly effects vendors capabilities and resources. Claims to be an industry authority, provides values and functions as an appraiser under the disguise of automated valuation modeling, without being subjected to the burden of strict regulatory scrutiny themselves. They’ve got everyone from part time drivers to realty persons doing the jobs which used to be tasked to appraisers, They’ve worked with FNMA to rewrite the entire appraisal form to something more friendly to their interests in automation and outsourcing, despite objections from the majority of all appraisers. These amc companies claim to represent the entire industry at the federal level, despite a clear super majority of all licensed appraisers refusing to even work with amc’s. Amc’s continue to exploit every system relentlessly without hesitation.
https://drive.google.com/file/d/1WM6MClJmIsXH6rZ2yGhcRFnHUkffZGkP/view
CO amc regulations last few pages. And now that the third party amc’s has fourth party inspection services, whom employ fifth party vendors, whom operate outside of their scope of defined licensing. How are any of their activities effectively regulated?
Lucky! I wonder if Texas has something like this.
Ok I was at the AARO spring conference in Savanah Ga. I would like to remain anonymous due to my job as an investigator. I asked if data collector would have to have E&O? Amc’s got very defensive. Basically appraisers are the ones getting sued. We carry all the responsibility and liability. Basically we have to do more fact checking. In rural areas this is almost impossible. I would recommend measuring yourself. Got alot of push back from the Amc’s, AI and most regulatory agencies. Oh also found out FHA/HUD is going to accept Licensees back to do appraisals. Also AMC’s admitted to offshore fact checkers for our appraisals.
They’re going to admit to a lot more soon
I need some help from the blogosphere on this issue.
A presentation is being made to the WA Real Estate Appraisal Commission (REAC) regarding PDCs. Obviously, this Post cites WV as having made the determination that PDCs violate WV law, However, I thought I heard that there were other states that had made a similar determination. Not many as of yet, but some. Is anyone aware of any other states that have made a final ruling regarding this?
Thank You in advance for any additional information.
for those familiar with my other posts,
YES, I don’t have a problem with the hybrid or even the PDC process itself under certain circumstances, but to have a PDC performed by an unlicensed person who cannot be held accountable, is unacceptable.
NO, contrary to others’ responses to my posts, this does not conflict with my statements regarding the hiring of a felon by Class Valuations as my point throughout that was that it was an unfortunate mistake that happens across all industries and just because it happened does not mean it was intentional, or even a sign of insufficient due diligence. You may disagree, but absolutely nothing is gained by a company knowingly hiring someone like that for any hybrid work as it exposes them unnecessarily to the risk of being sued, let alone any act that may have been committed by such a person if given the opportunity and access to a residence.
Refer to above post of mine, 04/20, 2;04pm. Second link. The state of CO did a study on which states have rules regarding home inspector licensing requirements.
My argument is simple; The body of regulation was formed around clear seperation of duties for distinctly different occupations. This new approach purposefully intermingles duties, thereby bypassing the intention of existing regulation.
Which is the path of least resistance and better efficiency; Allowing a bypass work around like property data collectors third party, which will inevitably result in conflict and the need for more regulations. Or to simply reiterate what previously did not even need to be written into rules, because it was taken for granted; That inspecting is for inspectors, sales is for salesmen, valuation is for valuators, etc. This is how the amc is getting over on every industry to capture market share, outsourcing everyones duties to someone else, skimming off the top of everything, bypassing nearly every existing regulation in the process. It’s a relatively simple argument which can be reiterated by any laymen, the wish to maintain existing sytems as being sufficient and not subjected to the laws of unintended consequences. Ask the logic challenge question why the lenders would want appraisers to rely on these unlicensed third party pdc’s, but still insist the appraiser not be shown full home inspection reports from qualified certified home inspectors? (irregardless if those lifelong career home inspectors are required to be state licensed or not). One inspector, the pdc, is nothing more than a temp using cell phone applications, no insurance, no accountability, passing all risk to the appraiser. The other is a qualified knowledgeable person whom maintains insurance and accreditation of some form, which is the traditional full service home inspector.
The simple solution is to write in a simple requirement, that any person engaging in property inspection, is required to either hold a state license, or maintain a minimum level of insurance if there is no state licensing requirements in place such as is noted by the CO state by state detail on which states require home inspection licensing and which do not. And to clearly state that anyone engaging in PDC activity, falls under the licensing and/or insurance requirement.
I subscribe to OREP for home inspectors. Because I’m always learning nifty tips and tricks for simple visual recognition of inspection fault items, like shown in this graphic taken from their most recent email. Even if I don’t always call these directly in reports, this gives me a better feel for effective age, track record of studious property maintenance, to provide helpful suggestions to people, etc.
Inspection is a specialty service, be that from the appraiser or the legitimate home inspector. This is not something that anyone can walk in off the street with some lame virtual training or cell phone app and competently recreate.
Thanks
This is interesting about NC home Inspectors https://youtu.be/3QSSR8Q7Xww
also this
https://youtu.be/wxN-AyxwzN0