8 responses so far ↓

• 1 Brian J. Davis // Mar 23, 2008 at 5:18 am

  Paul -

  This agreement has FAR REACHING effects on how lenders and mortgage brokers will interact with real estate appraisers.

  Both Fannie Mae and Freddie Mac have signed agreements to implement the Home Valuation Code of Conduct and create the Independent Valuation Property Institute as a ‘condtion” for the NY AG Cuomo dropping his lawsuit against them.

  There are many significant provisions in the agreements that are designed to strengthen the independence of appraisers, including:

  * eliminating broker-ordered appraisals,
  * prohibiting appraiser coercion, and
  * reducing the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages.

  The agreements also enhance quality control in the appraisal process and establish a complaint hotline for consumers.

  The agreements include a Home Valuation Code of Conduct that the Enterprises will apply to lenders selling mortgages to Fannie Mae or Freddie Mac. The Code becomes effective on January 1, 2009.

  As you might imagine these sweeping provisions are being questions by not only appraisers but mortgage brokers as well.

  A special Home Valuation Code of Conduct category can be found on the Appraisal Scoop blog:

  http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/home_valuation_code_of_conduct/index.html

• 2 Paul // Mar 23, 2008 at 7:15 pm

  Brian, I followed that link and read the comments on Appraisal Scoop and Wow! Looks like someone stirred up a hornet’s nest!

  It seems to me an appraiser’s livelihood is on the line with this one if the IVPI works similar to the VA roster.

• 3 Brian J. Davis // Mar 24, 2008 at 3:43 am

  Paul - You’re right! Every one, including appraisers, mortgage brokers, appraisal management companies (and banks that one them), and appraisal organizations are scrambling to find their niche in these new proposals.

  Agreements have been “signed” . . .Now every one trying to position themselves to either keep the business they have or to use these new agreements to reposition themselves to be in a position of power.

  Appraisers are split (nothing new there) on whether this is going to be good for the profession or not?

• 4 Chris Matthews // Apr 1, 2008 at 3:36 pm

  HVCC - The NY Attorney General in his own words “BELIEVES” a private investigation of Fannie Mae has discovered wide spread inflated appraisal values. The source of the inflated values are corrupt appraisers and mortgage brokers. The last time I checked mortgage brokers don’t apply their signature as the primary or review appraiser. If the investigation found fraudulent appraisals why aren’t the offenders being prosecuted? If the investigation found mortgage broker bribery why aren’t the offenders being prosecuted? Isn’t the NY Attorney General responsible for prosecuting criminals. What every happened to the phrase “innocent until proven guilty”. The new code will allow the so-called corrupt appraiser and so-called corrupt mortgage broker to continue doing “indirect” business. Sounds like the NY Attorney General is more interested in making a name for himself than carrying out the duties of his office “PROSECUTION”. With every new crisis in America elected and appointed officials broad stoke the public with new feel good codes / laws. I for one say enforce existing law. If an industry has wide spread corruption what better way to rid the bad element than prosecution. The back room closed door process in which this agreement has been struck is further suspicious. Apply the smell test. STINKS! Contact congress and oversight committees. I plead congress will play a role in shutting down this one man show. The consequences will have far reaching negative consumer impact.

• 5 Brian J. Davis // Apr 1, 2008 at 4:03 pm

  Chris - The problems with inflated appraisals result from lender/broker/amc “pressure” on appraisers to hit predetermined “inflated” values.

  This most often starts with a broker “shopping” or “fishing” for an appriaiser using the . . “I just need a “Comp Check” to see if this loan will work”

  They’ll keep fishing for a “Good” appraiser until they find one that’s hungry enough to do anything.

  Honest appraisers are forced out of the business, broaden their services to exclude mortgage work, or . . . knucke-under.

  Appraisers that don’t “Play Ball” are blacklisted with no recourse.

  The NY AG’s Home Valuation Code of Conduct attempts to address these issues.

  You can BET that Fannie and Freddie were aware of this! They signed the HVCC agreements to prevent FURTHER investigation.

  NY AG Cuomo would only have to scratch the surface to find all the evidence he needed to support his case.

  This is ALL ABOUT restoring faith in the financial markets and mortgage backed securities.

• 6 Chris Matthews // Apr 1, 2008 at 11:31 pm

  Mr. Davis,
  Biblically I understand all activity “of man kind” are subject to corruption. However if your quote is accepted literally (“Honest appraisers are forced out of business, broaden their service to exclude mortgage work, or…knuckle-under”) the appraisers currently licensed are dishonest. I can read between the lines and don’t think this to be your true implication. If an individual will sell his/her license and integrity for a few bucks no provisions of NVCC will help. We as a society are governed by openly debated standards and laws. Let us all remember Fannie and Freddie are quasi-government institutions. The public deserve open honest discovery. Not closed door unprecedented agreement whereby those cited formulate public policy. The public deserve protection which in the simplest language means prosecution. As a republic we denounce back room closed door agreements which further legitimize conspiracy. Faith in the financial markets and mortgage backed securities aren’t best served when deep pocketed offenders are given a pass. If parties thru the process (buyers, sellers, real estate agents, appraisers, brokers, lenders, banks, government agents … ect. ) are exposed as guilty prosecute the offenders. As a society we simply cannot accept innuendo (”In my opinion, 70 percent to 80 percent of appraisals that were done during the housing boom are probably not worth the paper they’re written on,” Jonathan Miller, New York appraiser told The Wall Street Journal.) as fact. Mr. Cuomo has been scratching the surface for over a year and certainly should have the evidence to support his cases(s). I am suspicious however as Mr. Cuomo has elected to legislate vs. prosecute. Our system of government provides legislative action conducted in an open representative format. Not dictated by the self-appointed.

• 7 Gina Gardner // May 28, 2008 at 3:18 pm

  According to Bloomberg, Fannie and Freddie’s tactics re: inhouse appraisers may just be illegal.

  http://www.bloomberg.com/apps/news?pid=20601103&sid=aKdad5sfCPBk&refer=news

• 8 Mark May // Jun 19, 2008 at 7:09 pm

  The new Fannie Mae and Freddie Mac guidelines is another example of this country heading towards socialism and eliminating free enterprise. I think the the appraisers, brokers, agents that are dis-honest and in the business of corruption should be prosecuted to the fullest extent of the law. They’re responsible for the down fall of the housing market and they should be held responsible instead of penalizing the honest appraisers, agents and brokers that have worked extremely hard to establish their businesses.

  My opinion is those that are caught should be prosecuted to the fullest extent of the law if that means placing them in correctiona facilities then so be it. If an example is made of those in the business of corruption it will stop. The new guidelines are only hurting those who are trying to conduct business the honest way.

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