Has FNMA Gotten Too Big to Control?

Has Fannie Mae Gotten Too Big to Control? Has Fannie Mae gotten too big to control? That was one of the many questions asked to Senators & Congressman while in Washington DC.

The agreement on whether Fannie Mae has gotten too big to control was unanimous. Most believe that the company is too large and complex to be effectively managed by the government. They argue that Fannie Mae is too big to fail, and that if it were to collapse, it would have a devastating impact on the housing market.

Others believe that Fannie Mae is sorta manageable, and that the government has taken steps to reduce the risk of a collapse. They point out that Fannie Mae is now under the control of the Federal Housing Finance Agency (FHFA), which has a mandate to protect taxpayers from financial losses. FHFA has allowed Fannie Mae to act as if it has zero oversight.

Ultimately, the question of whether Fannie Mae is too big to control is a complex one. There are strong arguments on both sides of the issue. Only time will tell whether the government will be able to effectively manage the company in the long term. As it stands right now the answer is NO. Their blatant elimination of real estate appraisers is a front and center line item for them. The use of unqualified, unregulated, unlicensed, and uninsured data collectors speaks volumes. It harms the consumer. It harms the industry. It harms the individual appraiser. It harms all small business owners.

Here are some of the factors that have been cited as evidence that Fannie Mae IS too big to control:

The company’s size: Fannie Mae is one of the largest financial institutions in the world, with assets of over $17 trillion. Possibly more than that.

The company’s complexity: Fannie Mae’s business is highly complex, and it is difficult for regulators to fully understand the risks involved. The regulators don’t want to know. Which is why we will continue to speak with Senators in Washington DC.

The company’s interconnectedness: Fannie Mae is closely interconnected with other financial institutions, so its collapse could have a ripple effect throughout the financial system. That’s not horrifying at all.

The Average Joes will keep lobbying and fighting. It’s not over until the fat lady sings. We are not giving up on OUR profession.

By Pro Appraiser, Certified Real Estate Appraiser

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28 Responses

  1. Avatar Pat Turner says:

    It’s time for Congress to come to the rescue!!

    • Avatar don says:

      TWS published an article 6/28/2024 about US congress having to deal with the chapter eleven filling of YELLOW, (YRC), a very large trucking company that congress was responsible for. The Department of Defense was also suing them for fraud, and they had agreed to pay $6,85million.
      Congress had relented on granting a loan, which has become due, and they are out of money.
      Chapter eleven is for reorganization, where-in they can discount the amounts owed and continue operation.
      How will congress decide FNMA’s situation?
      Will our Democratic-Republic continue to argue amongst themselves or allow investors to protect themselves thru litigation.
      Litigation may reduce the number of appraisers or not?

    • Avatar Rose Johnson says:

      Congress is not interested in coming to the rescue. They are also not interested (nor is the VA) in mortgage fraud perpetrated or continued ignored by Freddie Mac or its waterfall associates (lenders, appraisers, insurers, etc.)

      My husband and I currently have a lawsuit for mortgage fraud against FM, and the others noted. We are told it is the first of its case in the United States.

      The VA position is that the original home purchase loan would never have been backed (guaranteed) had the fraud been known. Yet, the VA caves to lenders and servicers who want paid despite their knowing (or should have known) of the original fraudulent documentation.

      The engineer admitted he didn’t document missing certification; the appraiser has remained silent and obtained legal counsel. The lender and servicer know they failed to obtain the legally required information.

      My Veteran husband and I have ceased all mortgage payments to force resolve. Freddie Mac wants indemnified by the lender and servicer.

      I want the home that my husband and I paid for, not the legal salvage that we have since discovered was purchased.

      Congress created Freddie and Fannie, and Ellie and all the other Mac and Mae Enterprise messes. Yet, Congress doesn’t want to resolve their mess. It is an undue burden upon the tax paying public.


  2. Avatar Jaydee says:

    Congress needs to do their jobs and conduct oversight. The last time “it hit the fan” was 2008. The GOP want to conduct oversight of the GSE’S. The dems. all resisted and the RINO’S went along and poof!!!!! Collapse!!!. We’re headed that way again. Time to clothes – line the GSE’S. BTW, I tossed in the towel last Friday. 25 years appraising, 20+ active duty USN – Now fully “Retired”. Good Luck Everyone!!!!

    • Avatar George says:

      The GOP wanted to conduct oversight of a business?????????????? That’s hilarious!!!

    • Avatar Mike says:

      Congratulations on your retirement and thank you for your service to our country. Unfortunately, after 35+ years in this industry, I am still unable to retire (2008 didn’t help). I’ve always taken great pride in my work, trying my best to excel in specific education, technological advancements, as well as developing strong relationships within the industry built upon my reputation. It seemed that I was the “leader” for fee increases in the area over the years.

      Alas, I’m getting crowded out by “form fillers”, AMC’s, “nickeled and dimed” on everything, as well as FNMA’s drastic elimination of professional appraisers. Funny, but when I look back at all the B.S. changes within this industry over the years, I feel that the much of my “old work” hand-typed with carbon paper was just as informational and valuable back then, as recent reports reviewed. I’ve always loved what I’ve done (until recently). Looks like I’ll be making an escape route as well. Best of luck to you in your retirement!

      • Baggins Baggins says:

        This morning I was reviewing the AVM regulatory standards, fsb, open letter writing period.

        Please take the time to write a letter people.

        So far only one letter posted on their site, but the read is quite remarkable.

        What happens behind the scenes, how much people are additionally put at risk, when companies switch to only automatic valuation models instead of using licensed human appraisers. The comment writer states he was shocked. Absolutely, that is a surprising story. Ocwen related. It does not take a rocket scientist to figure out why a company set like altisource/ocwen would prefer to never have to deal with a licensed human appraiser, when managing the properties they have on their books. One less point of oversight is highly appealing to a company like that. As for the defrauded party in question, the migrant gardener, never stood a chance, toast, finished, all the money is gone. Their life savings vanished through a clever mechanism of stacking fees, transferring the note, and skipping the appraisal. Brought to you by the appraisal management industry. (second link for the comment.)



    • Retired Appraiser Retired Appraiser says:

      Welcome to the club Jaydee!

      • Avatar Jaydee says:

        Thank you. Today is my sixth consecutive Saturday! FINALLY tackling that encyclopedia called the “honey do list”.

      • Avatar CKJ says:

        After 40 years I retired in March. I read the writing on the wall and it said: “we do not want you nor do we need you.” My house is paid off, my new car is paid off, I have money in the bank, an IRA and SS so I am good. Getting up in the morning knowing I am no longer being dictated to by dimwits is a very good feeling.

  3. Avatar Kimberly DeFilippis says:

    FNMA was designed to be too big to control and safeguards have never been put in place in all the years FNMA has continued to be under conservatorship. Too big to control = too big to fail. Its a government sponsored enterprise with zero government oversight…WIN WIN for its top heavy leadership team Priscilla Almodovar, David Benson, Sharifa Anderson, Malloy Evans, Michelle Evans, Chryssa Halley, Jeffry Hayward, Steve James, Nancy Jardini, Anthony Moon, Katie Jones, Ramon Richards, Terry Theologides, Cissy Yang. Director’s pay totaled over $17 million dollars in 2019. Compare that to what you make as an appraiser. The money ain’t in appraising, folks.

  4. Avatar Tim says:

    I’m confused, the article states that its unanimous that it’s too big to control but then goes on to state others believe it is manageable. It also says there are good arguments on both sides of the issue. I’m not commenting on either side of the issue because I am not qualified to do so. It’s just that they started out on a concrete stance and then watered down their own argument.

  5. Retired Appraiser Retired Appraiser says:

    I’m not so sure that I agree. Andrew Cuomo controlled FNMA pretty well in 2008 when he blackmailed them into signing off on HVCC. The appraisal industry was hijacked because our leadership was lacking in mob style thinking. If you cannot think like the mob, your only solution is expose the crime(s) and pray that the justice system will make things right. CLASS ACTION boys! It’s coming.

    P.S. For the record, 1 of 2 wrongs has already been corrected. Andrew Cuomo was given enough rope to hang himself. It’s up to us to correct the other injustice.

    • Baggins Baggins says:

      O.k., well, where do I sign up?

      • Retired Appraiser Retired Appraiser says:

        The fact that you are willing to sign up tells me that this is an extremely promising remedy. I would have placed a bet on the sun not rising today before betting I would ever read that question from you.

        • Baggins Baggins says:

          My positions remain consistent. If you have something to sign, share the link.

          Popular appraiser author Miller on this site mentioned in zero hedge article.

          As the nimwits managing GSE programs keep their heads in the sand while continuing to prop up real property price and value with their modernization tech wizardry.

          I, mean, like, where, is, the, market, correction??? Answer is that there is no market correction, not for the regular borrowing citizen. However, special insiders whom GSE managers grant first purchase opportunities to defaulted loans and other various special terms, their margins are increasing. There is no ceiling, but the program managers assure a high floor so the bottom will not fall out. Everything moving along right as planned. Pump, eliminate checks and balances, illusionary market stability, then dump. Except this time around, happening in the background, only insiders may benefit. The thing about stable housing markets is a lie.

          New Jeremy Bagott article just hit. Site administrator quite busy. Worthy of an immediate share. If you can forward this, please do.
          ——————-The False Compassion of Inflated Appraisals.—————————
          Oh my bad, can not provide you a link, because I do not have a twitter to get past this log in wall nonsense. And they’ve denied even simple bots, so there is no way to find the direct link online via regular searching for recent material. If you have a twitter login, it will probably be the latest article post. As the articles via email also have no ‘view this in web browser’ for a clear link to post, sorry, can only direct you how to find this online. If you’ve subscribed to his news letter it should have just hit your inbox today.

  6. Avatar Kimberly DeFilippis says:

    This is my letter ~ I am a certified residential real estate appraiser. I have been licensed and appraising in 3 states for over 17 years. A perfect example of a a horrible AVM is that created by Zillow. Their ZEstimate is an AVM that is incorrect ~ even for the property owned by their CEO! FNMA is a GSE that is in conservatorship. Their business practices are fraudulent and now CFPB wants to allow them to use an AVM to value properties they use as collateral? Lets take a look at FNMA’s own appraisal form. The 1004. An AVM cannot put eyes on the property. AN AVM cannot determine if there are deed restrictions. An AVM cannot determine if there are back taxes due to the appropriate taxation authorities. An AVM cannot describe a neighborhood and its boundaries, zoning compliance, highest and best use, adverse site conditions (easements or encroachments). An AVM cannot describe utilities or site improvements. An AVM cannot determine if the gross living area as calculated by municipal tax assessor is accurate. In my experience it is not. In most municipalities the tax assessor cannot legally enter the property. How does the assessor know the quality and condition of the property? How does the tax assessor know if that addition was permitted and if it is legal? AVMs utilize census tract information which is inherently BIAS (redlining). How does an AVM determine the number of rooms, whether there is functional obsolescence? Whether or not there is external obsolescence? How does an AVM determine quality and condition? What if there were upgrades since FNMA started its illegal UAD data collection? What if the data amassed by FNMA is incorrect? Repeating a lie over and over again does not make it true. Consumers are not protected when they are taking out the largest loan in their lifetime; a mortgage. If the property is over-valuated by an AVM, the consumer is immediately under water. Having been a loan-closer in the early 2000s prior to the financial meltdown, I closed many loans where the borrowers took cash out and told me, (bold-faced with no emotion), that they were taking the equity out of their homes, leaving the keys on the table and walking away. This was in a time when appraisals were not required to get a HELOC. AVMs are just like this prior situation. Using AVMs will put a great financial strain on an already strained system in the United States. It will devalue the dollar and deprive homeownership to millions of people. Is this what CFPB (the Consumer Financial Protection Bureau) was created to do?

    • Baggins Baggins says:

      Interesting. Is there a delay in the way they post the comment letters online? There were like four different options to click to submit an avm comment letter, one at the one site, and three options at the other site. I figured, probably would comment at both sites, one seems like a three agencies in one comment, but you still have to click which one. What would be the motivation for borrowers to take the equity and walk, keys on the table?

      This is one letter writing location. Mary wrote a detailed letter.
      And this.
      So that’s a little confusing but if people wanted, they could deposit the same letter in two different locations, may be a good idea. I’m going to get something in there at least by the deadline.

      Has anyone posted the call to avm letter writing on the appraisers forum? If not, someone should.

      • Avatar Kim DeFilippis says:

        Fraud, fear, loss of job, health issues…a myriad of reasons.

        • Baggins Baggins says:

          I’m struggling to understand why they would not simply sell. Unless they’re somehow confident that the heloc brings them more cash than an open market sale?

          I ran into a couple a year or so back whom sold at the actual peak, and simply rented out their neighbors investment property, with plans to buy again a year or two later after some market deflation happened. They really called that one but also were well to do so it was just one of their many investment strategies.

          Meanwhile I’ve seen countless instances of ibuyers and these companies like opendoor whom buy cash then resell either taking substantial losses, or having carved out substantial earnings where the people whom sold to them would have been better off with a realty agent. These big corporations whom speculate in real estate using the avm technology are skewing sales figures across the country. They are changing the definition of market value or at least challenging traditional methods of data sorting and data validation. How can we call this activity being in alignment with the ‘well informed adequately represented’ expectations? There is a systemic effect where regardless if the big corporation relying on avm’s win or lose, they skew market data figures which in turn, the various avm systems and human participants then rely on down the line.

          I’m still waiting like three years later for my neighbors probate sale record to fall off, which was reflective of market value two or more years prior to the actual sale recording. Was a working accident and took the family quite some time to sort out the real properties final sale disposition, so sale was reflective of a previous point in time. Yet the Realist avm systems incorporated the data and subsequently skewed value estimates downward substantially for this whole neighborhood. People took real losses comparative to their potential if there was no avm involved or if that avm would have been coded differently to omit that sales record as not contemporary and skewed data. Agents used those figures to negotiate pricing downward.

          These are but a few examples of the many unreliable issues which will disrupt peoples notions of housing market stability and fair pricing, if appraisal modernization efforts come to full fruition. The avm systems managers and the technical programmers apparently do not understand the concept that price is not the same thing as value. Additionally they appear incompetent when it comes to the task of properly qualifying data before relying on said data for market value analysis. Yet another example of GSE managers encouraging over investment in housing, or likewise not providing adequate protections for vested participants.

          Also, was that your actual submitted letter? I found that quite interesting how you illustrated that many potential failure points. They’re selling rainbows again, and never look back in retrospect to consider if anyone was harmed by the practices.

    • Avatar don says:

      The Tax Assessor does have access; Complaints can’t be answered without the assessor’s inspection. Politics do have some control, however the voting constituency is protected.


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Has FNMA Gotten Too Big to Control?

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