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cyborg7
558 Posts |
 Posted - 03/03/2008 : 06:48:32 AM
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| Anyone have a guess? |
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Scrooge McDuck
16638 Posts |
Posted - 03/03/2008 : 07:05:38 AM
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| a post about appraisals w no replies. today is an amazing day. |
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mganovsky
2123 Posts |
Posted - 03/03/2008 : 07:27:37 AM
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| If you are talking about the possibly new apprasor guidelines that Fannie may come out with stipulating that Mortgage Brokers can not order an appraisal and lenders that no longer can use in-house employees to do the appraisal. If Fannie does put this in to affect the eff date is 1 Sep 08. |
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gdavenpo
408 Posts |
Posted - 03/03/2008 : 07:34:28 AM
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quote:
Originally posted by cyborg7
Anyone have a guess?
The better questions is how long will it last? |
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Bob H
326 Posts |
Posted - 03/03/2008 : 08:07:11 AM
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We are damn lucky that this was not signed off on a week ago. FNMA was ready to agree with Cuomo before a regulator stepped in and balked. Time is our friend right now. There is no doubt that the agencies realize this is a tough change and is not really in anyones best interest. My gut tells me a middle ground will be struck. Affiliated arrangements may be no longer allowed but taking the process away from the broker is very bad for business all the way around. Look for a stronger check and balance process. AVM's, BPO's, desk reviews, and field reviews will likely become more common.
Two of my wholesale banks already run my appraisals through a 3rd party fraud and inflated value check. I have absolutely no problem with that practice. |
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Originate_This
388 Posts |
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RGK2394
2247 Posts |
Posted - 03/03/2008 : 08:37:43 AM
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Does anyone have any clear explanation or interpretation of what specifically is being rolled out? Watching the news reports, etc., would lead one to assume that a large broker or lender will not be able to utilize "in-house" appraisers or not be able to own any stake of any appraisal company, etc., but I am not seeing anything that states a broker will be unable to order an appraisal from an independant, third party appraiser-
The link provided above doesn't spell out exactly what will be changing other than there will be a Federal appraisal comitte of sorts where people can call in with suspected fraud, etc. |
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mganovsky
2123 Posts |
Posted - 03/03/2008 : 08:39:27 AM
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| OK then what will be the new "code" it said it was attached but there was not an attachment. |
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Originate_This
388 Posts |
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Bob H
326 Posts |
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slants
5451 Posts |
Posted - 03/03/2008 : 08:44:53 AM
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That link is missing exhibit A containing Home Valuation Code of Conduct. Here it is on pages 8 -11. http://www.fanniemae.com/media/pdf/030308_agreement.pdf
Home Valuation
Code of Conduct
I. No employee, director, officer, or agent of the lender, or any other third party
acting as joint venture partner, independent contractor, appraisal management
company, or partner on behalf of the lender, shall influence or attempt to
influence the development, reporting, result, or review of an appraisal through
coercion, extortion, collusion, compensation, instruction, inducement,
intimidation, bribery, or in any other manner including but not limited to:
1) withholding or threatening to withhold timely payment for an appraisal
report;
2) withholding or threatening to withhold future business for an appraiser, or
demoting or terminating or threatening to demote or terminate an
appraiser1;
3) expressly or impliedly promising future business, promotions, or increased
compensation for an appraiser;
4) conditioning the ordering of an appraisal report or the payment of an
appraisal fee or salary or bonus on the opinion, conclusion, or valuation to
be reached, or on a preliminary estimate requested from an appraiser;
5) requesting that an appraiser provide an estimated, predetermined, or
desired valuation in an appraisal report, or provide estimated values or
comparable sales at any time prior to the appraiser’s completion of an
appraisal report;
6) providing to an appraiser an anticipated, estimated, encouraged, or desired
value for a subject property or a proposed or target amount to be loaned to
the borrower, except that a copy of the sales contract for purchase
transactions may be provided;
7) providing to an appraiser, appraisal management company, or any entity
or person related to the appraiser or appraisal management company, stock
or other financial or non-financial benefits;
8) allowing the removal of an appraiser from a list of qualified appraisers
used by any entity, without prior written notice to such appraiser, which
notice shall include written evidence of the appraiser’s illegal conduct, a
violation of the Uniform Standards of Professional Appraisal Practice(USPAP) or state licensing standards, substandard performance, or
otherwise improper or unprofessional behavior;
1 An “Appraiser” must be licensed or certified by the state in which the property to be appraised is located.
9) ordering, obtaining, using, or paying for a second or subsequent appraisal
or automated valuation model in connection with a mortgage financing
transaction unless there is a reasonable basis to believe that the initial
appraisal was flawed or tainted and such basis is clearly and appropriately
noted in the loan file, or unless such appraisal or automated valuation
model is done pursuant to a bona fide pre- or post-funding appraisal
review or quality control process; or
10) any other act or practice that impairs or attempts to impair an appraiser’s
independence, objectivity, or impartiality.
Nothing in this section shall be construed as prohibiting the lender (or any third
party acting on behalf of the lender) from requesting that an appraiser (i) provide
additional information or explanation about the basis for a valuation, or (ii)
correct objective factual errors in an appraisal report.
II. The lender shall ensure that the borrower is provided, free of charge, a copy of
any appraisal report concerning the borrower’s subject property immediately upon
completion, and in any event no less than three days prior to the closing of the
loan. The borrower may waive this three-day requirement. The lender may
require the borrower to reimburse the lender for the cost of the appraisal.
III. The lender or any third-party specifically authorized by the lender (including, but not limited to, appraisal management companies and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third-party (including mortgage brokers and real estate agents).
IV. All members of the lender’s loan production staff, as well as any person (i) who is
compensated on a commission basis upon the successful completion of a loan or
(ii) who reports, ultimately, to any officer of the lender other than either the Chief
Compliance Officer, General Counsel, or any officer who is not independent of
the loan production staff and process, shall be forbidden from: (1) selecting,
retaining, recommending, or influencing the selection of any appraiser for a
particular appraisal assignment or for inclusion on a list or panel of appraisers
approved to perform appraisals for the lender; (2) any communications with an
appraiser, including ordering or managing an appraisal assignment; and (3)
working together in the same organizational unit, or being directly supervised by
the same manager, as any person who is involved in the selection, retention,
recommendation of, or communication with any appraiser. If absolute lines of
independence cannot be achieved as a result of the originator’s small size and
limited staff, the lender must be able to clearly demonstrate that it has prudent
safeguards to isolate its collateral evaluation process from influence or
interference from its loan production process.
V. Any employee of the lender (or if the lender retains an appraisal management
company, any employee of that company) tasked with selecting appraisers for an
approved panel or substantive appraisal review must be (1) appropriately trained
and qualified in the area of real estate and appraisals, and (2) in the case of an
employee of the lender, wholly independent of the loan production staff and
process.
VI. In underwriting a loan, the lender shall not utilize any appraisal report prepared by
an appraiser employed by:
(1) the lender;
(2) an affiliate of the lender;
(3) an entity that is owned, in whole or in part, by the lender;
(4) an entity that owns, in whole or in part, the lender
(5) a real estate “settlement services” provider, as that term is defined in the Real
Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;
(6) an entity that is owned, in whole or in part, by a “settlement services”
provider.
The lender also shall not use any appraisal report obtained by or through an
appraisal management company that is owned by the lender or an affiliate of the
lender, provided that the foregoing prohibitions do not apply where the lender has
an ownership interest in the appraisal management company of 20% or less and
where (i) the lender has no involvement in the day-to-day business operations of
the appraisal management company, (ii) the appraisal management company is
operated independently, and (iii) the lender plays no role in the selection of
individual appraisers or any panel of approved appraisers used by the appraisal
management company.
Notwithstanding these prohibitions, the lender may use in-house staff appraisers
to (i) order appraisals, (ii) conduct appraisal reviews or other quality control,
whether pre-funding or post-funding, (iii) develop, deploy, or use internal
automated valuation models, or (iv) prepare appraisals in connection with
transactions other than mortgage origination transactions (e.g. loan workouts).
VII. The lender will establish a telephone hotline and an email address to receive any
complaints from appraisers, individuals, or any other entities concerning the
improper influencing or attempted improper influencing of appraisers or the
appraisal process, which hotline and email address shall be attended only by a
member of the office of the General Counsel, Chief Compliance Officer or other
independent officer. In addition: (1) each appraiser now or hereafter on any list of
approved appraisers, or, upon retention by the lender, will be notified, in a
separate document, of the hotline and email address and their purpose; and (2)
each borrower, as part of a cover letter accompanying the provided appraisal, will
be notified of the hotline and email address and their purpose. Within 72 hours of
receiving any complaint, the lender will begin a preliminary investigation of the
complaint and upon completing the inquiry (or, after a period not to exceed 60
days, whichever shall come first) shall notify the Independent Valuation
Protection Institute and any relevant regulatory bodies of any indication of
improper conduct. The name and any identifying information of the person or
entity that has filed such a complaint shall be kept in strictest confidence by the
office of the General Counsel, Chief Compliance Officer or other independent
officer, except as required by law. The lender shall not retaliate, in any manner or
method, against the person or entity which makes such a complaint.
VIII. The lender agrees that it shall quality control test, by use of retroactive or
additional appraisal reports or other appropriate method, of a randomly-selected
10 percent (or other bona fide statistically significant percentage) of the appraisals
or valuations which are used by the lender, including the results of automated
valuation models, broker’s price opinions or “desktop” evaluations. The lender
shall report the results of such quality control testing to the Independent Valuation
Protection Institute and any relevant regulatory bodies.
IX. Any lender who has a reasonable basis to believe an appraiser is violating
applicable laws, or is otherwise engaging in unethical conduct, shall promptly
refer the matter to the Independent Valuation Protection Institute and to the
applicable State appraiser certifying and licensing agency.
X. The lender shall certify, warrant and represent that the appraisal report was
obtained in a manner consistent with this Code of Conduct.
XI. Nothing in this Code shall be construed to establish new requirements or
obligations that (1) require a lender to obtain a property valuation, or to use any
particular method for property valuation (such as an appraisal or automated
valuation model) in connection with any mortgage loan or mortgage financing
transaction, or (2) affect the acceptable scope of work for an appraiser in
connection with a particular assignment. |
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RGK2394
2247 Posts |
Posted - 03/03/2008 : 08:55:46 AM
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| Yeah that's not so good...for Brokers or the appraisers we've spent years building relationships with. |
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rsaunders
332 Posts |
Posted - 03/03/2008 : 08:56:48 AM
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Can I get a comp check?
Read item #5 ... 
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johnnyboy38109
4665 Posts |
Posted - 03/03/2008 : 09:16:32 AM
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quote:
Originally posted by Bob H
We are damn lucky that this was not signed off on a week ago. FNMA was ready to agree with Cuomo before a regulator stepped in and balked. Time is our friend right now. There is no doubt that the agencies realize this is a tough change and is not really in anyones best interest. My gut tells me a middle ground will be struck. Affiliated arrangements may be no longer allowed but taking the process away from the broker is very bad for business all the way around. Look for a stronger check and balance process. AVM's, BPO's, desk reviews, and field reviews will likely become more common.
Two of my wholesale banks already run my appraisals through a 3rd party fraud and inflated value check. I have absolutely no problem with that practice.
I agree fully. Well stated. |
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CoolMtgGuy
12187 Posts |
Posted - 03/03/2008 : 09:17:17 AM
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I have no problem with brokers losing the right to order the appraisal, or lenders losing the right to use their inhouse appraisers, but what process will replace what we now have? Again, the politicians and our own associations are asleep at the wheel.
All Fannie Mae has to do is to publish a standard appraisal order form with check boxes so crooked originators cannot manipulate the appraisal process ... but that would be too simple. Killing a knat with a cruise missile seems to be the preferred way. Knee-jerk type legislations at its finest.
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RGK2394
2247 Posts |
Posted - 03/03/2008 : 09:18:06 AM
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| What really ***** is that the appraisers we've all worked with over the years will be left out in the cold, hoping to get on "the list" at whatever new appraisal management company gets the contract with each lender you utilize and get paid probably half of what they are today, and sites that are free as of now, zillow, cyberhomes, etc., will most definitely start requiring a fee for info that is of any use. Loan volume down, appraisal volume down, home values down, expenses up..... |
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RGK2394
2247 Posts |
Posted - 03/03/2008 : 09:18:40 AM
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quote:
Originally posted by rsaunders
Can I get a comp check?
Read item #5 ...
F a comp check...can you get an order? |
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Bob H
326 Posts |
Posted - 03/03/2008 : 09:29:13 AM
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III. The lender or any third-party specifically authorized by the lender (including, but not limited to, appraisal management companies and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third-party (including mortgage brokers and real estate agents).
Let me get this straight, it will be the responsibility of the wholesale lender to order the appraisal? The wholesale lender is also responsible for payment? That is quite amusing if taken verbatim. I assume that the wholesale lender will likely require the borrower to pay at the door. What if the final appraised value doesn't fit the program applied for but it will work at a different wholesale bank. Is the appraisal transferable or does another one have to be ordered? At what point is the appraisal ordered? Does the application have to be delivered to the wholesale bank? How do we switch banks when we have to change programs? Who's property is the appraisal that is ordered by the wholesale lender? How much time and energy is going to go to complete waste by this change?
You see where I am going with this...... this change is anti-consumer, anti-broker, and anti-wholesale lender. Brokers originate 60% of mortgages in the US. This percentage is for many damn good reasons. We are incredibly competitive, totally customer oriented, and provide the absolute largest selection of loan programs available. We have the ability to go anywhere with our loans and our clients love it. Cuomo and the Agencies are making a mistake. I just don't think this change is well thought out at all. The Agencies and Cuomo are going to regret this decision by the end of Jan. 2009.
Do you think Fannie's and Freddie's phones are blowing up right now with wholesale lenders expressing serious concerns? These lenders are the Agencies' life blood. They will be heard! |
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slants
5451 Posts |
Posted - 03/03/2008 : 09:38:33 AM
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Page 5 does provide for comments and amendments. So it's not written in stone, yet:
".... Fannie Mae shall provide the opportunity for comments from market participants on its implementation and deployment of the Code; commentators should provide copies of their comments to OFHEO. The parties to this Agreement understand the significance of the reforms provided for herein and therefore will in good faith review the comments received during this period and will consider any amendments to the Code necessary to avoid any unforeseen consequences...." |
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808
4550 Posts |
Posted - 03/03/2008 : 09:51:53 AM
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| I have no problem w a mandatory independent 3rd party review if they want to regulate inflated appraisals and shut up the conspicary theory people. However if you take the broker from ordering the appraisal it's gonna create gridlock. Why do you think FHA changed their appraisal process a couple yrs ago. Because it wasn't working and they started losing all their originations to subprime. What incentive does an appraiser have to go out and make mad money when their orders are dictated to them by big brother on a rotating basis. Have a mandatory 3rd party review, charge $100 for it and pass the cost on to the borrower. The bad appraisers and brokers will be weeded out by this continuation process just as well. Oh, and by the way, thanks WAMU & eAppraiseIT. Your right up there w Ameriquest in my book. |
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RGK2394
2247 Posts |
Posted - 03/03/2008 : 10:20:09 AM
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quote:
Originally posted by 808
I have no problem w a mandatory independent 3rd party review if they want to regulate inflated appraisals and shut up the conspicary theory people. However if you take the broker from ordering the appraisal it's gonna create gridlock. Why do you think FHA changed their appraisal process a couple yrs ago. Because it wasn't working and they started losing all their originations to subprime. What incentive does an appraiser have to go out and make mad money when their orders are dictated to them by big brother on a rotating basis. Have a mandatory 3rd party review, charge $100 for it and pass the cost on to the borrower. The bad appraisers and brokers will be weeded out by this continuation process just as well. Oh, and by the way, thanks WAMU & eAppraiseIT. Your right up there w Ameriquest in my book.
A-effing-men |
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slants
5451 Posts |
Posted - 03/03/2008 : 10:21:45 AM
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quote:
Originally posted by XXSASSXX31
According to the document...it only applies to WAMU doesn't it??
Have you read this thread? Or the link titled HOME VALUE PROTECTION PROGRAM
AND COOPERATION AGREEMENT between the Attorney General's Office and Fannie Mae/Freddie Mac? And the 3 page Code copied and pasted above referencing the industry as a whole with no mention of any lenders? Wher did you even see WAMU? |
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SRA.Appraiser
6 Posts |
Posted - 03/03/2008 : 12:03:21 PM
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"According to the document...it only applies to WAMU doesn't it??"
...Duh...
The agreement applies to loans the GSEs fund.
You remember, Fannie and Freddie??
Maybe Wall Street is looking for more of those good loans. |
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