Reconsider the Rule on Deferred Appraisals
ICAP commented on the impending Interim Final Rule that will allow real estate appraisals to be deferred for 120 days for certain real estate transactions. The letter states that the deferment could lead to several unsettling possibilities.
The letter implores the agencies to reconsider this rule. Now is not the time to walk away from safety measures meant to insure the present and future movement of real estate, but to embrace them.
Public Trust is the appraiser’s primary concern. To not have this certified and insured professional involved at the outset of real estate lending during this time, in some fashion, would be to create circumstances that could create additional, possibly insurmountable, consequences than those it was intended to solve.
We would like to comment on the impending Interim Final Rule that will allow real estate appraisals to be deferred for 120 days for certain real estate transactions. While we applaud the interest in providing relief to those affected by the current COVID-19 crisis, we are alarmed at the proposal and the obvious grave exposure it would create for consumers, financial institutions and the National economy. Appraisals completed by insured, professional, state credentialed appraisers are required as a safety measure and to protect the public trust. While lowering standards and inducing commerce with incentives and capital might temporarily facilitate activity during our time of crisis, confidence in our system is what prevents further damage and provides for a quicker recovery. Removing the requirement of an appraisal during the origination of a loan, to be completed at some later date, not to exceed 120 days, could lead to several unsettling possibilities. During this tumultuous time, loan defaults can happen suddenly as unemployment hits instantly and markets falter. Real estate markets that have steadily risen and have given widespread support and appreciation to America’s homeowners, are now subject to forces we have not seen since the last severe recession. What possible mitigating procedures could a lender implement against a loan originated with confidence only to discover 120 days later they miscalculated the value of the collateral and now are upside down or over-leveraged. How would this impact the risk of default, if a default had not happened already within these first 120 days?
- Reconsider the Rule on Deferred Appraisals - May 11, 2020
- Appraisers Considered an Essential Business - March 22, 2020
- Bringing Evaluations Under USPAP’s Umbrella - September 6, 2019
Public Trust is NOT the primary concern of appraisers.
IT is the honesty of the reporting contract.
Appraisers contract for differing values: Present value, Future value, deferring the value estimate of value for 3 months to facility a future purchase, or a completion date are common differences.
Locking appraisers in to single in-alterable practice, is pricing control for the client and ruination for the contracting appraiser!
They may want to add 60 days on that figure.
We’re playing the ‘who can kick the can further’ game.
First one to stop kicking and release the defaulted loan flood gates loses. HUD Covid(TM) fact sheets.
For servicers.
https://www.hud.gov/sites/dfiles/SFH/documents/IACOVID19FB_FactSheetServicers.pdf
For consumers.
https://www.hud.gov/sites/dfiles/SFH/documents/IACOVID19FBFactSheetConsumer.pdf
HUD is in the lead! Hot on his heels is FNMA. We’ve got Freddie coming around the bend and gaining speed! Oh no, hard money lender just stumbled on the turn! Gasping for breath, far behind, we’ve got an amc way back there folks. I think crowdsource lending did not even make it out of the gate! It’s still a close race with the leaders though, stay tuned!
I just modified the old bumper sticker for 2020. Attached.