An outline exposing the unintended consequences created by HVCC and the Interim Rule February 23, 2012, Hon. Richard Cordray, Director, Consumer Financial Protection Bureau Re: Appraiser Independence Regulations Dear Director Cordray: Thank you for taking the time to meet with NAIHP on January 26, 2012. We always appreciate the opportunity to meet with the CFPB and discuss issues of concern that affect consumers and small business housing professionals. Although, our meeting covered a broad range of issues, my comments today are limited to the ongoing problems associated with “Appraiser Independence.” Today’s interim Rule on Appraiser Independence, was built on the...
If you’ve paid for a home appraisal within the last five years, a chunk of that charge likely went to a middleman you never knew existed. And because a third party was used, it might have driven up your closing costs and affected the quality of the valuation. Lenders often use appraisal management companies to block collusion between mortgage brokers and appraisers — and to comply with anti-fraud rules the industry adopted in May 2009. The hotly debated reforms have boded well for the appraisal managers, whose presence in the U.S. has jumped from a handful in the 1990s to...
Wanted: Angry Appraisers Experienced residential appraisers have spent the past 30 months wishing for change and wondering if it would ever come. Most were fooled into believing that justice could be found by writing to politicians, signing petitions, and waiting for their state agencies and appraisal organizations to fix the problem. Nearly two years passed and the remaining appraisers continue to tread water while scanning the horizon for signs of a rescue. Appraisers awakened on April 1, 2011 (Appraiser Fool’s Day) with renewed hope, only to find that the tiny clause within Dodd Frank, “customary AND reasonable fees” had been altered at...
When the final chapter on this housing crisis is written, I hope that I am still around to see those who were responsible for its cause and the feeble attempts to fix it held responsible. One of the worst fixes is the Home Valuation Code of Conduct. Enacted in 2009, HVCC was spearheaded by then New York Attorney General Andrew Cuomo. His objective was to rein in appraisal abuses by the lenders sending loans to Fannie Mae or Freddie Mac. A noble goal, but by the time this so-called fix went into action many of the worst offenders were either...
Virginia Coalition of Appraiser Professionals (VaCAP) Letter to Senator Warner Addressing the Negative Repercussions of HVCC and Dodd Frank Act Dear Senator Warner: In response to the devastating effects of the legislative changes that have crippled the appraisal profession and undermined the quality of appraisals, appraisers throughout Virginia have joined together to educate the public, raise consumer awareness, protect appraiser independence, and work toward effective legislation that will benefit us all. We have now formed the Virginia Coalition of Appraiser Professionals (VaCAP). VaCAP appreciates this opportunity to present to you the position of appraisers across the state regarding federal legislation as it...
Help Regulators Take Proper Aim, Appraisal Institute Tells Congress CHICAGO (July 14, 2011) Testifying before a Congressional subcommittee, the Appraisal Institute’s president-elect on Wednesday told lawmakers their intent was “right on target” and asked them to “guide the regulators’ aim” in implementing consumer-friendly real estate appraisal guidelines. Sara W. Stephens, MAI, told members of the House Financial Services’ Subcommittee on Insurance, Housing and Community Opportunity that the Dodd-Frank Act passed by Congress last year is not being properly implemented by federal regulators. Among other highlights, the Act calls on appraisal management companies (AMCs) to pay “customary and reasonable” fees to residential...
Yesterday, the GAO released its analysis of the Real Estate Appraisal Profession and its regulatory framework titled Residential Appraisals: Opportunities to Enhance Oversight of an Evolving Industry. Full report can be reviewed or downloaded below. Summary of analysis: Real estate valuations, which encompass appraisals and other estimation methods, have come under increased scrutiny in the wake of the recent mortgage crisis. The Dodd- Frank Wall Street Reform and Consumer Protection Act (the Act) mandated that GAO study the various valuation methods and the options available for selecting appraisers, as well as the Home Valuation Code of Conduct (HVCC), which established appraiser...
A shift of regulations intended to prevent lending companies from influencing — or worse, inflating — home values during the appraisal process nearly put an entire industry of people out of work during the worst economic downturn since the Great Depression, according to industry experts. But what happened to independent home appraisers is a topic that almost no one talks about outside the real estate industry. After a parade of subprime home loans and shoddy lending practices by mortgage lenders brought the real estate market to its knees, the real estate-appraisal process was targeted in an effort to protect consumers....
Ownership Interest in an AMC At the NAR midyear Legislative Meeting in DC, the question of the appraisal epidemic and the problems associated with AMCs and HVCC were discussed. David Stevens, the current President of the Mortgage Bankers Association and the immediate past commissioner of FHA, brought up the appraisers’ geographical incompetence, a violation of the Standard. The question is, ask Frank Garay & Brian Stevens, hosts of the TBWS Daily Show, why is he bringing this up now, when he is the President of MBA and cannot do anything about it. And why didn’t he voice his concerns while...
A new frontier in appraising is upon us… Approximately 30 years ago the automobile industry began to introduce computers into cars and since that time they have never been the same. What was once considered a rather simple procedure – tuning up your engine or even changing the spark plugs – has become an almost impossible project for anyone, except the highly trained automobile technician. Today nearly every aspect of your car is aided or controlled in some manner by a computer. Digital radios with CD players, climate control systems, cruise control and pollution control devices are just a few...
