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Ted Rood
Senior Loan Officer , MB Financial Bank
on Wed May 27 2015, 3:43 PM
The news regarding revolving debt will be a game changer for many deals. Borrowers were always mystified when I told them they'd have to close accounts (often open for many years) in order to exclude the payment, even if they paid the cards in full monthly. Fannie is taking a big step towards helping home buyers here.
on Wed May 27 2015, 10:16 AM
Great site by the way. Luckily I floated as I was able to lock yesterday at 3.875. It would have been %4 / %4.125 if I hadn't waited.
on Tue May 26 2015, 12:22 PM
Renee, as I have stated and as pointed out in the article so clearly, the bar to obtain a realtors license is way to low (average of 70 hours) certainly as compared to obtaining a certified appraisers license! The report states "The opinion within the industry about its professionalism is not shared outside the industry" and I see this on a daily basis. I also ask the following Renee, how much exposure/experience does an agent really get over a typical year or 20 years? If a single agent is compared to a single appraiser, how many deals, purchase contracts, etc. are each really exposed to? During my trainee apprenticeship years and before I was ever legally able to sign a report by myself, I was involved in close to 700 transactions. As required by the state in which I practice, I had to document my hours within each report, indicate what sections I worked on, and ultimately submit to the state for review. With no apprenticeship hours required for licensing, and in part based on the volume of work for the typical agent, how much experience does each agent have over a given year or 20 years? If you assume an average agent closes 40 deals per year, over 20 years that agent would have been involved in only 800 transactions. Not to paint every agent with the same brush Renee, but the numbers don't lie and the standards need to be raised.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sun May 24 2015, 2:31 AM
Bill--your points are all valid, and they speak to a lack of transparency that unfortunately is a by product of the massive amounts of compensation reform that occurred in the wake of Dodd Frank. Comp plans for originators are in essentially the same boat--a rate may be paying a certain amount back to a lender, or an origination fee may be charged to obtain a rate, and the borrowers often assume that is what we get paid as originators. The truth is we will get a percentage of that varying according to what comp plan we select, or has been selected for us. Worse yet there is a growing trend amount servicing lenders to pay less for internal refinance transactions--that is a loan serviced by bank ABC and refinanced by a loan officer at ABC is likely to get a small fraction of the commission earned on a purchase, but still does the same amount of work. The comp plans lean toward incentivizing purchases, which is certainly beneficial to keep the flow of new money coming in. The problem is, this may creating the disparate impactdiscouraging the origination of refinancing, simply because they yield so little pay to an originator, but require the same amount of documentation and diligence. Some lenders even price more aggressively for purchases over refinances, which again, seems to create a disparate pricing impact against refinance consumers. From a secondary market perspective this makes perfect sense....if you are an investor receiving interest from a multi-million dollar pool of loans, you certainly don't want to have a bunch of those loans suddenly paid off --that reduces your cash flow and the value of that particular pool of loans. For the existing financed home owning consumer, the benefit of lower rates may not be fully realized due to these types of pricing strategies favoring purchase over refinance. If David Stevens truly wants to change the discourse from one of distrust to confidence, these issues and the ones you bring up are all going to need to be on the table for debate.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sun May 24 2015, 2:31 AM
Bill--your points are all valid, and they speak to a lack of transparency that unfortunately is a by product of the massive amounts of compensation reform that occurred in the wake of Dodd Frank. Comp plans for originators are in essentially the same boat--a rate may be paying a certain amount back to a lender, or an origination fee may be charged to obtain a rate, and the borrowers often assume that is what we get paid as originators. The truth is we will get a percentage of that varying according to what comp plan we select, or has been selected for us. Worse yet there is a growing trend amount servicing lenders to pay less for internal refinance transactions--that is a loan serviced by bank ABC and refinanced by a loan officer at ABC is likely to get a small fraction of the commission earned on a purchase, but still does the same amount of work. The comp plans lean toward incentivizing purchases, which is certainly beneficial to keep the flow of new money coming in. The problem is, this may creating the disparate impactdiscouraging the origination of refinancing, simply because they yield so little pay to an originator, but require the same amount of documentation and diligence. Some lenders even price more aggressively for purchases over refinances, which again, seems to create a disparate pricing impact against refinance consumers. From a secondary market perspective this makes perfect sense....if you are an investor receiving interest from a multi-million dollar pool of loans, you certainly don't want to have a bunch of those loans suddenly paid off --that reduces your cash flow and the value of that particular pool of loans. For the existing financed home owning consumer, the benefit of lower rates may not be fully realized due to these types of pricing strategies favoring purchase over refinance. If David Stevens truly wants to change the discourse from one of distrust to confidence, these issues and the ones you bring up are all going to need to be on the table for debate.
Renee Duval
Branch Manager, Merrimack Mortgage Company
on Sat May 23 2015, 10:03 AM
Despite the consumer's ability to access all homes available online, the experience of working with a true professional REALTOR cannot be understated. Market knowledge can assure a Buyer of finding the right home at the right place. An excellent REALTOR makes a difference. REALTORs and real estate agents need to communicate with the lender to get the best result for their buyers. The lending terms very much effect the end result. When quality REALTORs and quality lenders work together with the buyer, everyone wins!
on Fri May 22 2015, 6:26 PM
Talk about good timing with the release of this article and the client condition / reconsideration of value that I've not been getting paid for over the last few hours. The property appraised is located within a PUD and happens to be an attached unit with HOA fees, but is NOT of a condominium form of ownership. In an effort to challenge my opinion of market value, the agent / lender has provided me with multiple comparables to look at in an effort to raise the value. Unfortunately for me as I can't bill for my time, but all of the comps provided for review are attached condominiums and not similar to the subject. My value will stand, but with the lack of agent training and in this case the inability to determine what property type one is even selling, you must question what representation we are getting for the most important purchase of the typical person. PS, all condos in San Diego County regardless of the property type or being attached or detached, all have an APN's that end in 01 to 99.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Fri May 22 2015, 3:13 PM
So loan officers aren't listed among the top 50 "derail" factors cited by realtors? There's a refreshing change of pace!
on Fri May 22 2015, 3:12 PM
As this certified appraiser has been saying for years and as laid out multiple times within this websites comment section, the standards need to be raised for agents, brokers, loan officers, and home inspectors. Access the report in its entirety as I have, and under the Agents section, you have the following comment. "The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents. This knowledge gap threatens the credibility of the industry." The article goes on to state that it takes an average of only 70 hours or less to obtain a license. I personally worked in an appraisal shop as an hourly employee for years, worked under a certified appraiser for a few more years before I ever had the authority to sign a report by myself (+/- 8,000 hours). In addition to the real world experience, I have completed nearly 400 hours of continuing education both as required, and by choice. I will ask in advance, where are the comments, concerns, questions? The truth is out there people, if we only take the time to look for it.
on Thu May 21 2015, 6:47 PM
Thanks for the response Ted, but coming from me I have a few comments. I think if it was required reading to have every visitor on this site read my comments, than most would start to ask questions about AMC's and appraiser compensation. As it relates to where I post, I choose sites like this as the appraiser focused websites are all ready aware of the challenges facing appraisers today. If you visited those same appraiser websites Ted and spoke of mortgages and the issues facing your industry, I would guarantee that you would be overwhelmed with responses. Our message needs to be heard and if I reach just one person and it happens to be on this site, than I call that a success.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Thu May 21 2015, 5:22 PM
Perhaps readers are here more for loan questions, than AMCs and appraiser compensation, Bill. I wonder if you might receive more response to your posts if you were on an appraiser focused website. Personally, I wouldn't think to question posted reader visits due to the responses, or lack thereof, I got from an appraiser website were I to post about mortgages there.
on Thu May 21 2015, 1:23 PM
Candace1, here's some additional information on how BOA works their company owned AMC, Landsafe. For San Diego County BOA has 13+/- staff appraisers that do the majority of the appraisal work for them (down from 20 after layoffs 1 year ago). Again, the typical appraisal fee on the HUD-1 is reported as about $450, while staff appraisers are paid anywhere from 40 to 52% of the gross fee depending on their daily calculated averages. With the remaining 48 to 60%, BOA does offer typical company benefits, but in no way are they equal to the 48 to 60% collected from the appraisal fee. Bottom line, BOA collects an appraisal fee, forces the borrower to use their company owned AMC (Landsafe), pays a portion of the collected fee to the appraiser and keeps the remaining balance while never disclosing the fee breakdown to the borrower. As an independent contractor I can perform appraisal work for BOA by being an approved panel appraiser for their company owned AMC (Landsafe). The fee to the borrower is the same (say $450) while the portion paid to me is in the range of $300. Again, the remaining balance is funneled back to Landsafe/BOA while never being openly disclosed to the borrower. For additional raw data Candace1, read my other comments by clicking on the Community link at the tope of the page and select (Readers Comments). Although my comments may seem repetitive, the lack of open dialogue/comments on this page (few comments to them) indicates that my message is not getting through. Please let me know if you have any additional comments or concerns. Thanks.
on Wed May 20 2015, 4:31 PM
Speaking of Wells Fargo, most people are not aware that they own an appraisal management company (AMC) called RELS and are unlikely to know the inner workings. This is my experience with Wells Fargo and their AMC RELS. On a typical Southern CA home / loan the appraisal fee disclosed on the HUD-1 is around $450, and this is the fee paid by the borrower. The fee paid to the independent contracted appraiser working through their AMC is typically around $275. As the appraisal fees are not split on the HUD-1, the borrower is unaware that $175 is being paid back to Wells Fargo by way of their owned AMC, RELS. Why is this okay? Is the public aware of this practice? If anyone from Wells Fargo is reading is, I ask, how can you even attempt to pay an appraiser $45 for your in-house desk reviews (form WFDER) when the liability to the appraiser is just as high as compared to the original appraiser? By the way, BOA has a similar setup as they own their own AMC as well (Landsafe). With such an unresponsive community section on this site, I'm starting to question the number of visits each day.
on Tue May 19 2015, 12:55 PM
It is my opinion Mr. Stevens that no single industry has been more targeted than that of the appraiser professional over the past 7 years, or since the HVCC (2008/2009). My appraisal work is reviewed by my own software, the AMCs software, the AMCs line by line personal review, the underwriter, the listing and buyers agent, the loan officers, compared against the lenders AVM, the governments CU platform, and may have an additional desk or field review. I ask Mr. Stevens, are we placing the same checks and balances on real estate agents/brokers, loan officers, and or home inspectors? Are we asking for a 7 to 8 year commitment out of high school just to become licensed like the appraiser? Should we stay quiet when our clients can freely ask and demand 5 to 10 years of experience on top of the 7 to 8 years already committed just to complete basic assignments (12 to 18 years)? You ask for change Mr. Stevens and you're getting it. The number of appraisers nationwide has dropped from 110,000 to 80,000 over the past 5+/- years. You say that the dialogue of distrust must end, but when good regulations are presented such as the separation of the appraisers fees compared to the separate AMC charged fee, the idea is shot down. Do you want to know why the consumer has fear, when they find out that 10 to 60% of the appraisal fee is paid to some undisclosed third party instead of to the appraiser, their trust is broken. You say Mr. Stevens that the most problematic rules must be changed, but I ask who determines if there problematic? As included within the Dodd/Frank bill, the appraiser was to be paid a customary and reasonable appraisal fee and such fees were to be based on appraisal studies/government know fees (such as the VA schedule) and were to not include assignments from AMCs. Why did the Treasury give the industry an out and change the law to include fees that go through AMCs. If the people holding the money (the lenders) are rhinos then the appraisers saying theirs a problem are fleas. Although the fleas are saying there is a problem, it appears no one else seems to think so.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Tue May 19 2015, 12:55 AM
Bravo Mr. Stevens. I am glad to see a follow up to your fall speech. Hopefully this will be followed up with a call to action by your government affairs or public relations office to get the grassroots support of originators all over the country. Here is a possible place to start addressing High Level Item 1: 1) Change the dialogue. The lending environment is the safest and soundest in decades and consumers should feel confident applying for loans and purchasing homes. The dialogue of distrust must end. Perhaps we can begin this new dialogue with this: http://www.mortgagenewsdaily.com/channels/community/05012015-mortagage-protects-consumers.aspx
on Fri May 15 2015, 3:15 PM
Ted, are you aware of the appraisal fees the VA is charging in my state of CA? A typical non-complex house starts at $450 while condominiums start at $475. The VA is not permitted to use outside AMCs or software providers, so guess what, the appraiser gets the full disclosed appraisal fee! Not that the VA program is without fault, but without AMCs and unnecessary undisclosed AMC fees, the system has proven to be successful. Most real estate professionals are unaware of the weight times to become a VA approved appraiser, as often times it can take 5-10 years to fill a rarely available vacant spot. Could you imagine if real estate agents received their license, but had to be put on a wait list for 5-10 years to work in a certain high paying zip code. Or the hopeful 50 state practicing loan officer who finds out that their is a 5-10 year wait to practice in 10 high volume states. The practice would be similar to what appraisers face today with the VA system, however keep in mind that the time commitment of the appraiser prior to the 5-10 years, will have already been 6-8 years (bachelors degree +2.5 years of training). The Dodd/Frank bill made mention of regulating customary and reasonable appraisal fees based on known government fees (VA) but why was it not implemented? Lets enforce the regulation starting tomorrow, pay the appraiser via the VA schedule, and do away with the hidden AMC/software fees that are never disclosed to the borrower. Who's with me? One last thought, the VA system allows the appraiser to start to charge late fees when the appraisal fee is not paid within 30 days. Unfortunately, with some AMCs to this day, I still routinely get paid 30 to 90 days later without the ability to charge late fees.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Thu May 14 2015, 3:42 PM
It's great to say these new provisions benefit and protect borrowers, but at the end of the day, they're the ones who'll suffer the most when closings are delayed. I'd love to hear how getting the closing disclosure three days early benefits refinancing borrowers, when they already have three days after closing to rescind AND there are already measures in place to prevent changes from previously disclosed fees.
on Thu May 14 2015, 11:56 AM
Who new there was something called a Home Price Perception Index (HPPI) that in essence compares a completely independent, unbiased, highly trained appraisers opinion to that of a home owner who is not independent, biased, and most likely not trained. Should we be surprised that "April is the third consecutive month where appraisers opinions are below homeowner opinions"? Although you won't find it discussed on this site, the question needs to be asked, how will the new TILA-RESPA guidelines effect the appraisal system. With strict guidelines in place as it relates to changing fees (including appraisal fees), do you think it will be easier or harder for an appraiser to get approval for an increase in fee post inspection with the discovery of previously unknown complexities? As appraisers we are assuming it will be more difficult to get complexity fees in the future, and thus have few but limited choices. Agree to do the assignment without the deserved fee increase, reject the order post inspection and most likely get paid nothing, or attempt to raise all of our fees to offset the times our requests for higher fees will be declined. The problem with attempting to raise our fees is that with traditional AMCs and companies that use software portals (Appraisalport, DVS, etc) is that are fees are set and predetermined by the client. If the past is a window into the future, our clients will not recognize the facts as I described, will not raise our overall fees, will be less likely to grant fee increases due to complexities in the future, and will expect more work for less money. What are your thoughts.
on Wed May 13 2015, 2:47 PM
Frank, I think your heart is in the correct place to build trust, however we as appraisers are provided daily reminders of just how unfair things are. I just took on a rush jumbo loan field review (form 2000) that pays me $200 + a $100 rush fee (48 hour turn time), while the AMC indicates within the specific scope of work, that the AMC fee is $195. What liability does the AMC have to where their split needs to be almost 50% of the non rush fee ( $200). Is the borrower made aware of the $195 being paid to an AMC? In this case the original lender is Pinnacle Capital Mortgage, and the AMC is InHouse. Within the scope of work requirements, it also specifically states that the appraiser needs to have a minimum of 8 years of experience to take the assignment and hold a certified residential license. If we are now requiring certified appraisers to hold bachelors degrees, and to have 2.5 years of training hours, then in this case we are asking appraisers to dedicate 15 +/- years of their life just to be able to say yes to the assignment. We ask less of our doctors in this country compared to what is often required of appraisers. In this specific case, although a jumbo loan, the dollar amount is less than 1 million dollars, thus a residential appraiser is qualified and a certified appraiser is overkill. In addition, there is mandatory years of experience needed for the appraiser to be able to complete a form 2000. My point is this, the appraisal industry already operates with a set of minimum standards (USPAP) and passing more regulation, and AMC rules will do nothing when lenders are free to add additional scope of work requirements at will.
on Mon May 11 2015, 2:47 PM
I ask why no one from Mortgage News Daily has picked up the story of Mercury Network (a subsidiary of A la Mode, Inc.) being sold to Serent Capital. As stated in the press release, Mercury Network is a valuation vendor management platform for the mortgage lending industry. Truth be told, A la Mode, Inc. is the largest provider of appraisal software in the industry, and that for the full package (Elite) charges near $1,500 per year to the appraiser. With yearly software fees and Mercury Network fees, I have personally deposited an estimated $30,000 to the greater company know as A la Mode, Inc throughout my career. Post HVCC (2008/2009), the company started milking $13.95 per assignment from either the lender or the appraiser when the assignment was ordered via their own Mercury Network system. Although the system has been touted as appraiser friendly (lower cost to the appraiser) the overall public should be outraged! This one company indicates within the press release that they handle 20,000 appraisal transactions per day, and if each transaction fee is what I have been paying ($13.75), we should all be alarmed! If $13.75 per transaction, this single AMC grosses $275,000 per day or just over one hundred million in gross fees a year! Why should the appraisers be paying millions of dollars in delivery fees per year or when the lender picks up the fee and ultimately charges the consumer, why is this not disclosed on the HUD-1 statement. Although we can pass consumer protection laws and start to apply AMC rules, does the average consumer / mortgage professional understand what is truly going on? My experience tells me no. Processors will continue to blindly select an approved appraisal company via the drop down boxes on their computer and have little understanding as to how each AMC company truly operates.
on Mon May 11 2015, 12:58 PM
I agree with the thought of building trust Frank, but from an appraisers point of view, the consumer may be worse off today than prior to the regulations of 2008/2009 (HVCC) and current (CFPB). The consumer is told on the HUD-1 statement what the appraisal fee is, but is kept in the dark as to who actually gets that money. There is no mandatory breakdown on the HUD-1 as to what portion goes to a possible AMC, what portion goes to the appraiser and what portion may go to an additional third party that charges the appraiser delivery fees. My current assignment is for a client (PNC Bank, National Association) who has contracted with a third party AMC (Urban Lending) who has disclosed a $125 AMC management fee (my split is $325). My experience tells me that the borrower has not been told of the $125 AMC fee, and as the borrower is not my client, I can't disclose my fee ($325). In addition, as the borrower will get a copy of the appraisal, all my AMC/portal using clients forbid me from including an invoice showing my $325 fee. Lastly, the state of CA has not adopted a policy to force the disclosure of fees into the report. With such lending tactics and strong efforts to keep the truth from the borrowers, is the consumer really being protected? Can lenders truly be trusted? In my experience, prior to 2008/2009 the appraisal fee on the HUD-1 statement was 90% likely to be the final fee paid to the appraiser, whereas today, it’s my opinion to be 90% wrong. Here's another example of non-disclosure by a client and a reason for the consumer to not trust lenders. I recently went back to a house to perform a follow up inspection (1004D) to make note of an installed carbon monoxide detector. In this case, the fee paid to me was $75 with the appraiser being forced to pay a $10 delivery fee by way of a company called Appraisalport (13% charge). While at the property, I was asked by the agent how in the world I could charge $125 fee to make sure the $10 CO2 detector was installed. With the system in place and the lender being my client, I again can never disclose the breakdown of the fees. In truth, my net gross was $65 ($75 - $10 delivery fee) and with additional business expenses including mileage (40 miles round trip) I cleared about $15 an hour. Again, the consumer pays $125 for a $10 CO2 detector while the AMC collects $50, a third party software provider collects $10 and the appraiser is asked why we charge $125. Before...
Ted Rood
Senior Loan Officer , MB Financial Bank
on Mon May 11 2015, 12:40 AM
This is a great first step. Maybe the Justice Department of CFPB can go after "duplicate collections" next. I had a recent client with a single charged off account. It was shown 5 times, with the original creditor, 4 collection companies, and 5 separate dates of last activity. Talk about Zombie debt!
Ted Rood
Senior Loan Officer , MB Financial Bank
on Mon May 11 2015, 12:36 AM
Great points, Frank. Sadly, there are few positive voices in the media when it comes to mortgages these days. My clients' typical comments on some of the documentation required is "why are you asking for that?" When they hear "it's for your protection, as determined by the CFPB and other regulatory bodies", they are sometimes placated. Sadly, it can be the folks with the most assets that bear the brunt of documentation requirements, when funds are transferred between multiple accounts.
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on Tue May 5 2015, 10:44 AM
Sorry to let the cat out of the bag Ted, but unless these Appraisal Management Companies (AMC’s) / software portal providers are nonprofit, they are in business to make money. It’s not a bold claim, as the business model is simple. The lender will charge and disclose an appraisal fee on the HUD1 statement (say $450), while often being under contract with a 3rd party provider (AMC) that will assign out the appraisal to whom they want. The AMCs gross profit is the difference between what they pay an appraiser (say $275) and the reported appraisal fee on the HUD1. The business model of Streetlinks (excluding their LenderX platform) does not establish a set minimum appraisal fee to be paid to the appraiser, but rather they simply often choose the least expensive quote to maximize their margins. Although Streetlinks will say they don’t solely choose an appraiser based on fee, it’s been an easy experiment to lower my fees $10 per week to magically receive work when the fee gets low enough. Not to paint every AMC with the same brush, but depending upon on the company, the actual offer or appraisal fee paid to the appraiser, will vary significantly. Although we as appraisers can never disclose to the borrower what our portion of the appraisal fee is (my client is the lender), borrowers freely offer what the actual appraisal cost. My experience tells me that the portion taken from the appraiser varies from a high of 60% to a low of 10%. My comment regarding Quicken Loans and their contracted AMC (Streetlinks) is not to say that a 50% split is typical, but to say it’s by no means out of the ordinary. If you say Ted that it’s a violation of Fair Lending Laws to disclose one fee on the HUD1 statement (appraisal fee), while actually paying an appraiser a lower fee, I’m here to say that is normal in this business. The government shot down recent efforts to modify the HUD1 statement to separate the actual fee paid to the appraiser, versus the fee paid to the AMC, but rather made it optional. In the state I practice (CA) they do not make it mandatory that within the appraisal report that the fees get separated (AMC portion / appraiser portion). In addition, the appraiser can’t disclose to the borrower what the true appraisal costs, nor can they include an invoice within the appraisal report. As I see it, although not federally mandated but now optional, it is up to the loan officer to do the homework to disclose what portion...
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Mon May 4 2015, 1:03 AM
Good question Thomas. I don't much care for moving averages except inasmuch as they can act as another guidepost keeping us apprised of our location on any particular road. Should we be most interested in simple, exponential, modified, adjusted, hamming, centered, weighted, or volume-adjusted moving averages? Why the 200-day (or 100-day, or 50, or 25)? These are nice round numbers that other technicians might be watching. While some traders might be keeping an eye on what technicians have to say, we can be sure that large amounts of money are moving according to monthly, quarterly, and yearly cycles. Considering the fact that most of the major data platforms calculate moving average based on business days rather than calendar days, the 252 day moving average (total number of non-bank holiday weekdays per year) is much more relevant than 200. This was also broken on May 3rd (incidentally, the 200-day was May 6th), but gives us more headroom as it's currently at 2.269 as opposed to 2.191. All that to say, "maybe." We could always be heading toward a huge nasty sell-off, but it will never be a sell-off that occurs because a moving average (or any technical indicator) was broken. Could the moving average break be a coincident indicator along with a fundamental or tradeflow-related shift? Absolutely. But in and of itself, the technical break is not what we need to fear. On a final note, my favorite way to not lose sleep over moving average breaks is to look at all the times they turn out to be meaningless--FAR more often than they turn out to be predictive.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Mon May 4 2015, 12:35 AM
That's a bold claim, Bill, and one that certainly would be a huge violation of Fair Lending laws. Would you like to cite your evidence for that accusation?
on Fri May 1 2015, 1:48 PM
You know what is scary? The last time the 10 year yield crossed above the 200 day moving average... May 3, 2013. That sparked a 6 week massive sell off. Could we be heading towards that now since we are only 6 ticks away from the 200 day moving average?
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Tue Apr 28 2015, 11:10 PM
Bill--your honesty and the question you pose are all valid,. I fear there is a level of apathy in the entire industry that doesn't allow a new debate about these issues to rise to the surface amid the ocean of regulatory change that continues to affect the frontline service providers like you and me. There is a perpetual ground war for market share and realtor referrals that doesn't translate to anything resembling a unified front that can 'protect' the housing consumer. I wrote an article a few years ago--Cowards Do That, and That Ain't You". I would pretty much say, Cowards Do That, and that is the housing industry. How many times do we blame a realtor, a title company, a credit reporting agency, a loan officer, an underwriter, a funder, the US government monetary policy makers, Dodd, Frank, Regulatory agencies, big banks, small banks, brokers, greedy investors, dishonest consumers, the BS stock market rally, the shadow inventory, the appraiser, unrealistic affordable housing demands, the lack of financial literacy of the average American consumer...for the multitude of things that challenge every mortgage transaction? There is honestly so much blame to go around, why bother trying to find any common ground? The truth is the pie is being divided up to compensate the frontline providers as little as possible, while the back end, secondary operations are where the bulk of the profit is made. The problem is, the primary providers are the ones with the most direct contact with consumers--and they don't have to look far on any mortgage related news site to see the adversarial tone that permeates the comments, stories and blog posts. The key is to unify as educators--but that will only happen when we respect each others' functions and importance in an unbelievably and unreasonably complex process.
on Mon Apr 27 2015, 6:19 PM
As a certified appraiser I could devote the next week of my time going through this article line by line and give you my opinion, however the appraisers opinion does not seem to be welcome by anyone. Ask yourself why you do the job you do and I'm sure if your created a top 20 list, the following topics / reasons would be on there. (1 - Pay). 10 years ago my average fee for a typical 1004/1073 report was North of $400, today it is just over $315. If I rolled back your salary to what your profession made 15 - 20 years ago, would you stay? (2 - Hours worked) With an average time to complete a single assignment now in the 10 hour range compared to 6 hours 10 years ago, would you stay? Again, if I rolled back your salary to what was typical 15-20 years ago and asked you to work 60 to 70% longer to make the same pay, would you stay? (3 - opportunity for advancement) As a business owner who performed appraisals, the advancement opportunities in the past were to hire more appraisers under your company name to add gross sales. With the regulations in place now, other than working more hours individually, ones income is capped by not having the same business expansion opportunities as in the past. (4- Liability) If I told you that you are NOT going to be judged by a group of your peers (other appraisals) but rather by a group of outsiders that do not hold a similar license, would you stay? Agents, loan officers, lower level AMC staff, borrowers, underwriters, and computer programs all will try and judge your work while not holding an appraisal license. (5- Increased entry qualifications) With reasons 1 - 4, who is going to spend tens of thousands of dollars to get a bachelors degree (4 to 5 years), spend 2.5 years obtaining the apprenticeship hours, complete all of the education classes, pass the state trainee, residential and at least the certified test to only have the opportunity to sign up with AMC's for potential work? The solution is easy Rob, keep raising the salary to attract people in high school and college so that they want to choose this career. If to become a lawyer you ask for the same time / education commitment as an appraiser, but pay 3 times more, you're going to turn out lawyers. Frank Ceizyk, please confirm by way of a comment / response that my entries are not being blocked?. Thanks.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Mon Apr 27 2015, 12:47 AM
If as an industry we don't embrace the role of financial educator, then we continue to do the same thing and expect different results. It's not surprise that Fannie Mae's survey found that tighter credit standards and waning demand were the primary culprits for declining mortgage volume in 2014. As an industry we all but start every conversation with 'well, sorry Mr/Mrs. Consumer but we have to make this ten times harder than it used to be because of all those pesky regulations. And by the way, we have to pass the cost of adhering to those regulations by charging you more than ever. But hey--even you consumer know that over the long haul housing is a great long term investment, because you just told Gallup that according to the results of a survey last week. Yeah--that doesn't seem like it's likely to build a bridge of trust to David Steven's desired 'confidence' in the mortgage industry.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Mon Apr 27 2015, 12:39 AM
This is a sobering article--the appraised value represents the most important component of whether a house is 'investment worthy', yet the professionals being asked to complete this important task are being paid less, being asked to take on more training and hours, and take on liability for lower down payment programs? This is another example of the lack of voice and leadership that exists at every level within the mortgage industry and all of the related partners. How can we bridge the gap from distrust to confidence if as an industry this is how we are treating the folks who establish the 'opinion of value' on every transaction we originate?
on Fri Apr 24 2015, 4:48 PM
When 81% of the institutions are planning a 97% LTV program, who in the circle (lenders, GSE, etc.) has asked how this increased liability will impact the appraiser. We as a profession have no central voice and don't have a seat at the table when these programs are rolled out. When in 2009 there were 110,000 appraisers nationwide and now there are only 80,000, who will complete the work? With a 97% LTV ratio are the lenders aware of the increased liability to the appraiser? Are they aware but will not consider increasing the appraisal fee? With lower down payments and increased foreclosure and buyback risk will they accept a complexity (higher fee) request from the appraiser? Will they ask for the appraisers qualifications or still assign by way of fast and cheap? With recent history as a guide, the appraiser will most likely be asked to do more work, take on increased liability, complete the work faster while making the same net fee from 10 years ago. I understand my opinion may vary from others and look forward to responses.
on Fri Apr 24 2015, 3:21 PM
With thousands of appraisals completed over the years I have a vast understanding of the liability facing my profession. With out a doubt, the liability increases with the lowering of the down payment. In addition, the amount of unbillable back end work (value reconsiderations, additional comps to look at, etc.) increases significantly based on the increase risk to the client. The lending industry thinks that complex assignments are solely associated with the property characteristics of the subject, however most assignments are declined due to the high risk associated with the assignment (increased time and liability). A good seasoned appraiser will decline the order, or ask for a fee that they find is appropriate for the increased liability. Most of the time these high liability assignments are pulled from the original appraiser (declined for a $50 increase) and shopped and accepted by appraisers that are unaware of the complexities / liability. No one is asking the tough questions, but often times you end up with less experienced appraisers performing the higher liability assignments. The borrower is never made aware of the increased complexities/liability to the appraiser and will never have a say in authorizing the increase in pay request, but rather the AMC will find someone to do it at a discount.
on Mon Apr 20 2015, 12:33 PM
When Quicken loans does appraisal business in my area they typically go through an AMC (Streetlinks),and to get any business the appraisal fee needs to be in the range of $250. When the borrower can pay up to $500 for the appraisal, one must question how the remaining $250 gets split between the AMC and the lender. Is it possible that the lender has extra money to use to go after the DOJ?
Ted Rood
Senior Loan Officer , MB Financial Bank
on Mon Apr 20 2015, 12:12 AM
On Friday, Fannie did release the new LLPA structure, which will be in effect for loans purchased after 8/31/2015. As expected, the 25 bps AMDC has been eliminated, but loan officers and borrowers might want to scrutinize the changes, as some are far greater than others. For example, cash out refis will have higher net LLPAs, as will investment loans. The changes do, indeed appear fairly "revenue neutral" overall, but few borrowers will gain more than 12.5 bps, while those whose pricing worsens may well lose more that 12.5.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Wed Apr 15 2015, 11:28 PM
Irony aside, every CFPB sanction only strengthens the case that they are truly needed to regulate the industry and protect consumers against unfair practices.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Wed Apr 15 2015, 1:43 AM
One can only assume that Majestic's mailer response rate may be a bit less, once they no longer flaunt TILA and Reg N guidelines. I suppose that's why they need AE's and sales managers!
Ted Rood
Senior Loan Officer , MB Financial Bank
on Wed Apr 15 2015, 1:33 AM
Hmmm, I closed a HomePath purchase in February, and my client got 4% in seller paid closing costs from Fannie, with no homebuyer education, and he wasn't a first time buyer either. In fact, Fannie guidelines allow seller closing costs contributions of up to 6% on HomePath purchases, even with as little as 5% down. Those guidelines are more liberal than typical Fannie restrictions (require 10% down to exceed 3% seller contributions). Not sure what Fannie's trying to accomplish here, other than to perhaps generate some publicity for a program that's essentially winding down at this point.
on Tue Apr 14 2015, 4:56 PM
That is classic... "The CFPB also alleged that the lender's advertisements failed to satisfy TILA requirements for advertising variable rate loans and misrepresented interest rates and estimated monthly payments, such as by misleading consumers to believe advertisements were for fixed-rate rather than variable-rate loans..." BUT "...If you're interested in learning more about working for a true customer oriented company..." hahaha
on Tue Apr 14 2015, 2:40 PM
Based on the extremely low standards, why cheat. Try becoming a state of CA Certified Residential Appraiser. Requires a 4 year degree, background checks, 100+ hours of specific appraisal education to qualify to take the state Trainee test, 2,500 hours of documented time under a Certified Appraiser, no less than 2.5 years studying under the appraiser, pass your state Residential Appraiser test, pass the state Certified Appraiser test and complete 56 hours of continuing education every 2 years. When the bar is set so low, the employees have NO skin in the game.
Bill Eggleston
Underwriter, North American Savings Bank
on Tue Apr 14 2015, 1:51 PM
I like the irony of reporting the consent order for Majestic Home Loans in the upper section, and the job openings in the bottom - well played :)
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Tue Apr 14 2015, 12:00 AM
Anybody in MND land going to this?: MBA's National Advocacy Conference 2015 April 14-15 | Capital Hilton | Washington, DC Speak Up! Make a Difference. We have a right to speak freely, and a duty to speak up. As a representative of an industry that employs hundreds of thousands of Americans, you cannot sit idly by while decisions are made that affect us all. You have a choice -- watch it happen and accept what may come, or be an active participant. Attend MBA's National Advocacy Conference 2015 to: Find out what the issues are Learn how they affect your business Get tips and talking points for discussions with lawmakers Then join your colleagues on Capitol Hill for a day of democracy in action. Together, we CAN make a difference. You have the right to be heard. Make your plans today.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Mon Apr 13 2015, 8:20 AM
This does so much damage to our industry, yet this ethically challenged lender will likely remain in business, or resurface as a new company in a few months. What our industry needs is a trust building campaign to offset these continuing sagas of impropriety and consumer abuse. I don't know anyone still in this business that conducts themselves in this manner, and these stories unfortunately perpetuate the impression that all mortgage professionals have the proclivity for dishonesty, which is why the CFPB came into existence to begin with. Much like the NARs image building showing Realtors as trusted gate keepers to professionals that help them find their dream home, the MBA needs to embark on a public relations campaign as the trust gate keepers to ethical mortgage professionals.
on Thu Apr 9 2015, 2:26 PM
As a Certified Residential Appraiser I have provided dozens of comments from an appraiser point of view, but each has been deleted by Ted. Is appraising a part of the mortgage process, if so and you want my opinion, please comment as such ASAP before Ted removes this comment. Thanks and please ask Ted via this community board why I have been silenced. Thanks and have a blessed day.
on Thu Apr 9 2015, 12:33 PM
Ted, can you unblock my comments so the general public on this board can view them? With the borrowers being mislead on the HUD1 statement concerning appraisal fees, with the inability of the appraiser to discuss with the borrower appraiser fees, with states like CA not requiring the report to reflect the separate fees the AMCs collect, and with lenders requiring that NO invoice can be included within the appraisal, I/we have enough people trying to keep us quiet.
 

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