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Appraisal Reform Accord Reached By NY Attorney General and GSEs

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New York Attorney General Andrew M. Cuomo announced an agreement on Monday between his office and Freddie Mac and Fannie Mae under which the two largest purchasers of home loans will buy home mortgages only from those lenders that meet new standards that it is hoped will ensure independent and reliable appraisals.

The agreement which also includes the Office of Federal Housing Enterprise Oversight (OFHEO) will create an independent organization to implement and monitor the new appraisal standards.



Fannie Mae and Freddie Mac, which purchase roughly 60 percent of all home loans originated in the United States, have agreed to the following:

  • Establishment of the "New Home Valuation Protection Code," which creates requirements governing appraisal selection, solicitation, compensation, conflicts of interest and corporate independence, among other reforms. Under the new code mortgage brokers will be prohibited from selecting appraisers and lenders will be prohibited from using "in-house" staff appraisers to conduct initial appraisals or from using appraisal management companies that they own or control.
  • Beginning January 1, 2009, Fannie Mae and Freddie Mac will require that lenders represent and warrant that appraisals related to mortgage loans originated on or after January 1, 2009 conform to the new code or they will not be purchased.
     
  • The new "institute" which will be funded with $24 million from Fannie and Freddie will field complaints from appraisers who believe that their independence has been compromised and will protect those appraisers from retaliation. The institute will also establish a nationwide consumer hotline to manage complaints about appraisal fraud or violations of the new code. The institute will be funded with $24 million from Fannie Mae and Freddie Mac and will be required to report to OFHEO and the Attorney General's office on a regular basis.

"Today's agreement with Fannie Mae and Freddie Mac begins to set right what had gone so horribly wrong in the mortgage industry - rampant appraisal fraud," said Cuomo. "The integrity of our mortgage system depends on independent appraisals. Again and again our industry-wide investigation found that banks were putting pressure on appraisers to drive up the value of loans just to make a quick buck. We believe the new standards, and the new independent monitor agreed to today, can begin to erase this problem from the industry."

"Accurate, independent appraisals are very important to ensuring the safety and soundness of Fannie Mae and Freddie Mac and the mortgage market," said OFHEO Director James Lockhart. "OFHEO is committed to working closely with fellow regulators, the Attorney General, Fannie Mae, Freddie Mac, appraisers, lenders and other market participants to assure that the roll-out of the new code builds upon best practices, recognizes constructive comments to identify further refinements, and avoids unintended consequences."

The new rules had been rumored late last week but apparently OFHEO had asked for more time to consult with other bank regulators. Reportedly Cuomo had laid down an ultimatum telling Freddie, Fannie, and OFHEO that he wanted a deal by early this week or he would sue.

Posted Mar 03 2008, 08:00 AM
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steve gatter
on Mon, Mar 3 2008 8:00 AM
I am a little unclear as to what is the problem that is now fixed. The article contains a quote from Mr. Cuomo that includes the words, "...putting pressure on appraisers to drive up the value of loans just to make a quick buck." To drive up the value of loans? Loans? So the problem that we are fixing is the bank's over-valuation of loans? or is it "appraisal fraud", which is also part of Mr. Cuomo's statement. Perhaps the article is incomplete but as we rush to stop the bleeding and fix all the wounds that are appearing, I truly hope and wish that we might identify clearly and exactly what the problem is before we create more bureaucracy. The mortgage industry is very regulated and over-seen now. Before we add more, let's be exactly sure of the problems to be resolved.
PaulLO
on Mon, Mar 3 2008 8:00 AM
Hand Grenade mentality...
Ian
on Mon, Mar 3 2008 8:00 AM
This is a solution? It's not clear to me what "New Home Valuation Protection Code" means. The phrase stating that the 'new institute' "will field complaints from appraisers who believe that their independence has been compromised and will protect those appraisers from retaliation" sounds as though they mean that the mortgage bankers and lenders will still have the means to wield influence same as ever, just don't get caught. Unless they actually establish a formal system for quasi-anonymous appraisal staff, there will always be pressure on appraisers. The tax payers and buyers have won nothing here. Appraisal companies competing for business will always want to please the lender so as to get as much business as possible.
paulo
on Mon, Mar 3 2008 8:00 AM
Another way to get rid of the mortgage broker? if you can't order an appraisal, you can't do a loan, I would say that this will pretty much get rid of the mortgae broker, which in turn is going to drive rates up, home values down to the basement and increase foreclosures... Even during the refi boom, I had subprime lender cutting appraisals left and right, if the appraisal was not realistic, the deal did not go through... (btw) Has Mr Cuomo worked one day at a mortgage brokerage? Order the appraisal, do not mention a value Sir and there is not a problem, Mortgage Brokers are people too...
Scott A. Austin
on Mon, Mar 3 2008 8:00 AM
How very ironic. The NY attorney general, so concerned about appraisers being "pressured" into compliance by unscrupulous appraisal management companies, has now successfully used the weight of his office to pressure Fannie Mae and Freddie Mac into an agreement whereby more appraisals will likely be ordered by... YOU GUESSED IT!... appraisal management companies! These same AMCs will of course cut the fee of the participating appraisers in half, effectively eliminating any qualified appraiser from being interested in doing the vast majority of appraisal work. Many highly qualified appraisers have already left the field for this reason. Those who go along with a lower fees will no doubt cut out time spent in the research and analysis required for credible appraisals How ironic. The intended goal was to get better appraisals. The result: Fannie and Freddie will now be getting lesser quality appraisals from less qualified appraisers. If the goal was to protect the appraisal process by putting teeth into the enforcement side of the process the AG failed. There is nothing in Federal Law or in this agreement that will allow for the prosecution of those who exert undue pressure on appraisers. Perhaps the Cuomo got a nice feather in his political hat. The people of NY (and anyone taking out a mortgage) would have been better off if he had stuck to enforcing existing law, rather than creating a toothless pseudolaw bureaucracy which will further undermine the goal of a credible appraisal process.
Harry
on Mon, Mar 3 2008 8:00 AM
Great, now it's the appraisers at fault. Lenders will review the appraisers work and then ask for additional supporting data if there was an issue, if issues are not resolved the loan is turned down. Isn't there supposed to be a tangible net benifit to the borrower to issue a loan? This just another way for the Establishment to try to get rid of Mortgage Brokers.
Lori
on Mon, Mar 3 2008 8:00 AM
What a tremendously flawed perspective. As an appraiser I am disgusted......rampant appraisal fraud," said Cuomo. What about the rampant, uneducated, fradulent, mis leading, lying cheating mortgage brokers, underwriters and loan applicants. Once again blame and penalyze the appraisers. If these entities even had a clue what appraisal management companies do they sould no be so willing to go that direction. Oh yes.....lets establish another government agency fo really screw things up since that is what they are so good at....$$ well spent fat boys.
Roger
on Mon, Mar 3 2008 8:00 AM
I see lender/mortgage broker loopholes already in this agreement. Lenders should not be allowed in a position to "represent or warrant" anything about the appraisal. They should be 100% out of the appraisal loop. Also, if Appraisal Management Companies are allowed to function as the "appraiser clearing house" what is to prevent another "Washington Mutual / E Appraise" conspiracy with their "proven or preferred appraiser" status which has been proven to pressure appraisers into inflating values and ignoring property negatives. This FNMA agreement is a start but the devil will be in the details.
PaulLO
on Mon, Mar 3 2008 8:00 AM
Another way to get rid of the mortgage broker? if you can't order an appraisal, you can't do a loan, I would say that this will pretty much get rid of the mortgae broker, which in turn is going to drive rates up, home values down to the basement and increase foreclosures... Even during the refi boom, I had subprime lender cutting appraisals left and right, if the appraisal was not realistic, the deal did not go through... (btw) Has Mr Cuomo worked one day at a mortgage brokerage? Order the appraisal, do not mention a value Sir and there is not a problem, Mortgage Brokers are people too...
Anonymous
on Mon, Mar 3 2008 8:00 AM
In every industry, at all levels, you will find unethical people. No matter what. So, maybe its time for stronger rules for these people too? Aside from the "unethicals," the question still remains. Is this really going to put better controls on the "over" valuation of properties from appraisers? I don't know. But, I haven't heard much from the OFHEO in regards to appraisers (especially in-house) who have undervalued properties by $20-30,000 because a bank or lender did not want to make a loan or how those undervalued appraisals hurt consumers. It has happened both to me and to past clients of mine. But, let's see if the "New Home Valuation Protection Code" works. If not, then it will be time to adjust the system until it works as best as it can. For programs like this, nothing works 100% of the time. It's just not possible. But, if this new program allows for some stricter reviews, especially for the long-term benefit of Fannie Mae and Freddie Mac who are also buying securitized blocks of mortgages off of Wall Street, then the program should be given the opportunity to solve (even if it's 90%) the pending Industry valuation problems. As a side note, without knowing the details of this "New Home Valuation Protection Code" - with all of the new technology like Zillow, MLS Realtor.com, etc. It seems to me, that some of the highest and best valuations for properties have been left off of those services or at least the recently sold valuations providing better comparables for those who are interested in refinancing or selling. I find it scary that these services are providing (and are being allowed to provide) valuation information to the public as a "free service" with this kind of outdated and potentially inappropriate and harmful housing valuation information.
DonS
on Mon, Mar 3 2008 8:00 AM
We in the mortgage brokerage and appraisal industry need a Monica Lewinski right now to divert attention away from us. "I did not have influence with that Appraiser" is the loan officer's claim while shaking a finger in your face. I have spent 30 years as an appraiser and will admit that loan officers and processors from finance companies, banks, mortgage brokerages, and appraisal management companies have always placed heavy pressure on appraisers to hit values or to avoid the whole truth. The management companies tell us to hurry, hurry, hurry, but to stop the process if it appears the value may not come in at the requested amount. Their appraisal order form has a requested value or owner's estimate just like everyone else's, so they're definitely not the answer. Loan officers and processors want "comps" upfront to know what the value will come in at before they actually order the appraisal. The account reps on the wholesale side want the deals to close too since their income is based on production. So, the new system is not a perfect fix and doesn't warrant being crammed down our throats in such a Clintonesque manner. Yes, the system has been corrupt for many years, but there have always been rules to comply with. Completely trashing the existing system seems a little harsh considering that this is a free market economy. The problem is that no one followed the rules. The new system will either discriminate and eliminate or it will have to include everyone on a rotating basis. This is how FHA used to be. FNMA, FHLMC, and FHA also used to be the approving authorities for appraisers prior to State licensing. Perhaps we should have a National Appraisal Care Program funded by taxpayer dollars. Then appraisers, like doctors under Hillary's or Obama's National Health Care Program, will have guaranteed lifetime income based on just being in the business and everyone in the country will be guaranteed free appraisals forever. There would be no need to work the free market system to get business and we would be completely protected from layoffs and influences under the socialized system. Or, perhaps we should pay more attention to whom we put in our government offices so this kind of unchecked government SOCIAL CONTROL can't happen to us. I would think this is where NAR, NAMB, BIA, AIREA, etc., would lobby to keep this new change from happening. Cuomo threatened to sue. I say bring it on! Let's sue him! After the bailouts of 1980's, the OMB reported that no S&L's suffered heavy losses from single family lending. That will be the case for the 2007 crash as well. The investor's gave the industry ridiculously liberal programs and then yanked them with no warning leaving the wholesalers with no place to sell their loan pools. Perhaps investors should have some form of restraints to prevent sudden pullouts after making handshake promises to purchase large loan pools. Short of fraud, wholesalers should not be forced to buy back loans, rather, the losses should just be factored into the investor's overall return. Tax free Government bonds could be sold to finance the purchase of these pools from the investors and everyone could continue doing business as usual. In the future, anyone caught trying to have influence on an appraiser will be required to wear a blue dress.
Roger the Loan Doctor
on Mon, Mar 3 2008 8:00 AM
Have you read the proposal yet? Guess who gets to continue picking and policing their own appraisers? THE BANKS!!! http://www.ofheo.gov/media/agreements/3308HomeValuationCodeofConduct.pdf Jeez, wasn't it the banks who got this whole mess started? Whatever the banks are paying their lobbbyists, it should be doubled. Also, a little glimmer of hope, correspondent lending appears to be lumped in with the banks. Just how a brokered loan is supposed to be appraised, I'm not sure.
Anonymous
on Mon, Mar 3 2008 8:00 AM
This is a huge step in the right direction. The proposal to the NY atty Generals Office includes oversight of appraisers, perhaps by appraisers. There will not be AVMs manipulated by loan originators who have a vested (can you say Commission) interest in the deal. The appraiser has had his/her fee beat down so the lender can make profit off of a cheap fee, not a professional fee....The only fear here is for the fly by night appraiser goes out of business and the loan process may become objective again. Only to the protection of the lender and the borrower. Ooops...the lenders want NO oversight at all...that way they can make any loan they wish to an unqualified borrower who has no down payment (interest) in the deal....AND the lender sells the paper on Wall Street.....That is why the American mortgage/banking industry has no credibility in the international foreign markets today......get the fees upfront...do not worry that the mortgage is backed by meaningful collateral...we make our money on upfront fees. Print this if you dare.
Anonymous
on Mon, Mar 3 2008 8:00 AM
Hopefully these changes will address 2 practices that have become commonplace in my region. First, for some time now brokers have been requesting comp searches from various appraisers with the appraiser responding with the highest estimated value getting the deal. So the most fraudulant appraisers obtain the most work. From what I understand comp search requests are not longer allowed and this practice should no longer occur. Second, appraisal management companies use appraisers based on whoever has the lowest fees. Since appraisal management companies have become separate profit centers who take a cut of the customer's appraisal fee, there is very little regard for quality of work with generally low quality appraisers willing to work for the lowest fees obtaining the highest volume of work. I am less certain that this issue will be addressed but am hopeful that my company is able to compete on a level playing field for work. Personally, I feel there is no excuse for any appraiser to commit fraud but it is a reality and something drastic needed to be done. I'm optimistic these changes will help.
Anonymous
on Tue, Mar 4 2008 8:00 AM
So as a recent home buyer who has watched as the prices for the very same house as mine in the same neighborhood (two doors down!) has dropped by 60K I can now sue the Bank, Mortgage Broker and the Appraisal Co. because the NY atty Generals Office has proven that my home was fraudulently appraised and the Bank/Mortgage Broker were in cahoots with the Appraisers to swindle me out of my money? I smell blood (money) and the Shark’s (Lawyers/Attorneys) certainly can not be far away!
Dave
on Tue, Mar 4 2008 8:00 AM
If I want to go to the local barber shop for a trim, the barber needs to have a licence to cut my hair. The the loan officers that cause people to lose their homes, go into bankruptcy and cause families to breakup only need a smile and a good bull.... story. Why aren't these people licensed? Why aren't they in court with the rest of the con artists?
Ron Grandorf
on Tue, Mar 4 2008 8:00 AM
It amazes me how manipulative our Government can be at misdirection of blame/finger pointing. In the appraisal arena, values are simply going down via deflation/recession and lack of funds available in the Mortgage Backed Securities arena. Simply put, the Government wishes to redirect blame to Mortgage Brokers and Appraisers by painting us with a negative brush versus telling the truth about the incompetence of several Government agencies,(SEC, Congress, etc....). that allowed these Sub-prime Loans that put us in this mess. Isn't it coincidental that the Dollar is losing value as property values are declining . Coincidentally,isn't it amazing that consumer confidence is at a 40 year low while rates are being manipulated by Bernanke to improve the US Economy as Foreign Governments are changing from a Dollar backed economy to a Euro or Asian based monetary system. The Dollar has lost all credibility in the eyes of the world and we are surprised that REIT's as well as Property values for all MBS's held by Foreign Countries are losing Money by holding on to the MBS: versus selling the security that is Dollar based for a commodity that will fare better in the EURO or Asian Economy. Yet, none of those issues are discussed/brought forward since it is far simpler to blame Appraisers and Mortgage Brokers versus the "People in Power". Come on, isn't that just a little too coincidental/convenient to point the finger at appraisers and Mortgage Brokers when in Reality the situation is truly a complex problem brougt on by many mitigating factors that have nothing to do with the parties Cuomo and FNMA/FHLMC blame for the problem. I wish I had the ability to exert such influence on such a complex problem, because I could redirect the blame/point the finger at any group but myself. I guess absolute power does corrupt absolutely, especially in the blame game.
Eric
on Tue, Mar 4 2008 8:00 AM
If I want to go to the local barber shop for a trim, the barber needs to have a licence to cut my hair. The the loan officers that cause people to lose their homes, go into bankruptcy and cause families to breakup only need a smile and a good bull.... story. Why aren't these people licensed? Why aren't they in court with the rest of the con artists? Above Posted By: Dave | Tue, 4 Mar 2008 09:43:13 EST Dave, Just cause the Barber has a liscense doesn't mean they can cut hair well. Liscensing may help some but it is not the answer. People need to speak with more than one mortgage professional and do business with a true professional who will not take advantage of them. Those people may be hard to come by, but they are out there.
Cyrus
on Tue, Mar 4 2008 8:00 AM
Who does Andrew Cuomo think he is? What office does he think he's running for? First of all, he's the AG for NY, not the whole country. He doesn't have any authority over the whole nation's appraisal process. I think in the USA, we have an Attorney General for the whole country. The OFHEO is supposed to regulate the GSEs, not Cuomo. He was chasing the Student Loan industry and when the RE downturn started making headlines he switches over to attack the banks and lending industry. What a slimy politician! So now only the banks are going to be able to order the appraisals? What does that mean? Big deal, the banks have their retail channels and are going to lowball all the appraisals now. At least with the Brokers, the borrower pays for his own appraisal and he gets an independant 3rd party opinion on value, not what the lender says its worth. I worked for Washington Mutual in its retail division when we had in house appraisal staff and after when we switched over to E-Appraisit and LSI. Now as a mortgage broker, I work with independant appraisers. What's wrong with asking your regular appraiser that you always work with what he thinks the property is worth before ordering a $400 appraisal that may be worthless otherwise? The consumer has his rights to have his own appraisal done that he can use with any bank he wants to. WaMu and other banks are all going to start charging $350-450 application deposit fees to "cover their appraisal costs" why is this more "independent" than the borrowers paying for their own appraisals via their brokers in the wholesale channel? Appraisal is not an exact science, you can get 10 appraisers to appraise a property and you will get at least 6+ different values. How is that? Hmm... Were there some excesses in the industry? Maybe, but let the market forces weed the bad actors out, not overly excessive regulation that didn't even go through the normal proceses that bill has to go through.. ie the House, Senate and eventually the president. I agree with the NAMB.. this is a de facto regulatory act that has no ground to stand on. Cuomo has no jurisdiction over Fannie or Freddie. The most that he should be able to do is regulate his own state of NY. As a mortgage broker in CA, I have no idea who he thinks he is telling us here what to do. Outrageous!
Scott
on Tue, Mar 4 2008 8:00 AM
The underlying problem with the housing "crisis" & our economy in general is really taxes (& currently energy prices - Thank you GW). Considering the lion's share of our income that goes to the government (to largely waste & enjoy for their personal gain), it isn't surprising people panic & go to extremes if even a small increase in their mortgage payment is encountered. Simply, most folks aren't able to use most of the money they earn because it is taken from them by our government. If this wasn't the case, an increase in their house payment wouldn't be a life threatening deal....But, it is...... Think for just a moment of all the ways they've got their hands in your pockets. Then think of how much you're often paying in taxes on the money you use to pay taxes....Just think about it. It's unquestionable that the finger pointing, particularly at the mortgage industry, is just another propaganda effort by our beloved politicians. "The conduct of public policy for personal gain" after all, is what they're really all about. And it's finally snowballed to the point that "ordinary" people are sacrificing the roof over their heads. As a really busy appraiser, I'm a little scared of things to come....They've relaxed the criteria for becoming an FHA appraiser, for example, to enlarge their heards of sacrificial lambs.....Additionally, with the rates lowered, we're seeing a level of appraisal orders that is nearly unmanageable.....Our exposure to risk, thereofore, is propotionately increased. I'm more thorough than ever, though, because I know where all this is going. I can only hope I don't make a mistake that will allow them to feed on me as an appraiser when it's time to propgandize the results of the recent rate game. If they do, though I'm diversified & financially secure enough to have a reason to finally slow down....I suggest you, dear reader, position yourself likewise. It's interesting to look back at ancient Rome and see the parrallel to our culture.....We're allowing the politicians with their corporate counterparts to drive us down the same road...And the scary thing is that the public is largely buying in to it all.... It's probably because everyone is so busy earning money to pay taxes & maybe keep enough to feed their families that they simply don't have time. It's ironic that I truly believe debt to be a bad thing...My wife & I live completely debt free and have done well... I do, after all, make a living largely from people and their home loans. (Wonder what they ultimately pay with interst over 30 years on my appraisl fee?) But, I also sympothise with people managing their debt load. They should not be taxed to the point where sometimes even a small fluctuation in their expenses causes dire consequences. I've worked extensively & more closely than you believe with national & local politicians. I can tell you from the highest level that it is a game. They see the "ordinary" man as lesser than they. We are simply the pawns in their game who provides a lifestyle, ego, & source of funding for their personal gains. I don't know what the solution is. But, I know that we can not, as a society, continue to let the government run our nation into the ground. I suppose the first step would be for everyone to see things for how they really are instead of how they are feeding it to us.
Anonymous
on Tue, Mar 4 2008 8:00 AM
I just read the New Home Valuation Protection Code. Bunk. I find it interesting that Banks want to get ride of Mortgage Brokers. For all of the salaries, office space, 401k, medical insurance, life insurance and other benefits banks receive from NOT having full time paid employees, you would think that these banks (along with lenders) would be THRILLED to have Mortgage Brokers in the Industry. The banks still get paid (maybe not full loan commissions, but they still get the benefit of "outsourcing"). Greed. That is all this is. Pure and simple. But let's see how consumers fair in these changing times both from a Legislative perspective and from a new business "arrangement" perspective. My guess is, "A" banks will find that they miss their little buddies "the Mortgage Brokers." Because, just maybe they will not be as successful in the B & C paper as they thought they were going to be. But only time will tell where less competition on pricing, loan products, # of lenders to chose from, types of lenders, and more legislation will have on the consumers and the banks "bottom lines" that want this business. Maybe someone can share P&L and Balance Sheet information in aggregate number in a year or two or three to see how Banks and Lenders fair out in this mess. Interesting times. Definately, interesting times.
TMOlsen
on Tue, Mar 4 2008 8:00 AM
When did Cuomo (D-NY) & FHMA-FHLMC become king of the US money market? How do they decide something SO HUGE without any elected offical, NAMB, & public opinion? Two small business industries closed - no appraisers & no mortgage brokers = no choice.
Anonymous
on Tue, Mar 4 2008 8:00 AM
This will not get rid of mortgage brokers. All this really does is rob small independant appraisal companies of their business. Most lenders, (like Countrywide Wholesale) and mortgage brokers, (like Sierra Pacific and Plaza Home Mortgage) are already requiring Landsafe does a review of all appraisals submitted. As I said, all this does is rob small businesses and give to the big banks. That's all. Nothing new.
paul
on Tue, Mar 4 2008 8:00 AM
I have been a Real Estate appraiser in Ma for approx. 10 years. i have worked very hard on my practice and have achived the level and volume I can handle, also I have worked very hard in providing good service to good clients, clients who DO NOT PREASURE FOR inflated values, and understand that appraisal can only be this high. So now how is my practice and my 10 years of hard work fit into the new picture ?? . I will now be fully dependant on some buracratic agency who will rush me with time frames and will most likely give me only the portion of my fee ?? How is this fair, how is this good for appraiser ? can anyone tell me also thouse new rules ( re brokers) are completely not nessessary since most if not all appraisals now are being reviewed ?
Anonymous
on Tue, Mar 4 2008 8:00 AM
Besides the market begin depressed here we go someone needs to try to take advantage of the situation and get their 15 minutes of frame. Non sense-Over Regulation-Knee Jerk reaction-it is obvious that cumo has never been involved in anything that pertains to mortgages I bet you that moron still rents. He wants to show us he's doing his job he is full of it and we should express our outrage. I am Glad I didn't vote for him and I am going to make sure when he is up for re-elections that I let everyone I know that he is a incompetent
Kathy
on Thu, Mar 6 2008 8:00 AM
Since everyone is playng the blame game, let's look at where it really starts and with credit scoring. Before you even begin to think of ordering an appraisal you pull credit. Depending on the score you have you are graded. Depending on whether you are an A borrower you get higher LTV's and better rates. If you are a B-C (bad & crappy) borrower you don't get to borrower as much. That's why the push for value, I could get somene a better rate, I could help someone get rid of the 27% interest rate on a card they had never even been late on. Credit scoring and the credit card industry play a big role in the start of all of this. What have people been doing with the cashout on these refi's? Paying off their high interest rate credit card, that is offered by the bank as soon as you close on your mortgage. If the government wants to do any kind of a bailout bring back the deduction of being able to write off that interest on credit cards on your taxes. Make the credit card company verify income too. If you can fog a mirror you can get a credit card. No one needs more than 2or 3 cards at the most. They get overextended on them, they can't write any of it off, so they refinanced their house because they could get that write off. The problem then goes back to being responsible for your actions. Those same people who had to get put into the 2/28's because of their credit score and poor judgement on accepting and using credit cards, went right back out and used them again. Why, because as soon as you did that your score went back up and 20-30 offers showed up in the mail offering you a card again. Credit scoring is a joke, it doesn't take into account how much money you make, how long you have been on the job, how long you have owned your home. That's what an undewriter is supposed to look at but now it's automated and the computer program doesn't care that you are behind because you lost your job, or had a heart attack. It just says you don't pay your bills, your a deadbeat, so you deserve a higher rate. Even though lenders are stll allowed to manual undewrite, I have never had a loan approved manually, when DU or LP denied it. You want accountability, put it on a loan officer or undewriter who can make a decision, based on all the facts, no on a fake-o score.
anonymous
on Sun, Mar 9 2008 8:00 AM
I just listened and read this thing. Are they basically handing the keys to hell to the devil. The lender being the one who chooses the appraiser is an old corrupt system from years ago before brokers were so primary. That was an old boys school thing, you had to have a bank in, and it was a hush hush situation on how far to reach when appraising. Each bank had it's own tolerance level of corruption. Appraisers were dismissed or ignored completely and hung out to dry if they were non compliant or messed up too much the loans. crude i am disgusted so far, and are they the ones who are holding the appraisers money also. They used to rip off the appraisers all the time with non payment or 60-60 day payments. Not good when the appraiser isn't paid at the door, otherwise the lender really torques control on you. It doesn't look good for the appraiser. I hope some equitable way for appraisers to do appraisalsa is made and we can get paid at the time of service. We don't make enough to get paid the next quarter of reporting.
anonymous
on Sun, Mar 9 2008 8:00 AM
so if only the lenders can order an appraisal then the brokers just go get a correspondant lenders license???
Bill
on Tue, Mar 25 2008 7:00 AM
This is fine and dandy, but I believe that the problem is and will always be with the Real Estate (so called) Professionals. They are the front door to all that has happended in the last 5 years and then they have the odasity to declare themselves the victims in this mess? Come on Mr. Cuomo, why don't you investigate some of the Realtors in the community and see what CRAP they unload on both Appraisers and Mortgage Originators!
Jake
on Thu, Mar 27 2008 7:00 AM
Let me clarify some points some post seem to not understand. Fannie Mae is a private company that has choosen to enter into this agreement. Of course the Attorney General of New York will sue them if they don't, because he has evidence against them. (the agreement says he will stop the investigation if they sign) Lenders don't HAVE to follow these rules. ONLY if they wish to sell to Fannie Mae, which yes is the largest secondary buyer and most lenders will conform to Fannie Maes guidelines, however it is not a "LAW". Legally Fannie Mae, as a private company, has every legal right to enter into such an agreement. The agreement, Titled "Home Valuation Protection Code", states that NO member of the loan production staff can order an appraisal... so basically no sales agent at a lender or mortgage broker only a seperate division that the lenders must pay to set up themselves can order appraisals. (Most Brokers could not afford such a division) Hope this clarifies wether you like it or not
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