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Anti-HVCC Rally-Lobby Day Upper Senate Park, U.S. Capitol
Wednesday, April 14, 2010
Rally: 10AM to 11:30AM Hill Lobbying: 11:30 to 4PM
Open to all housing professionals, at NO COST! It is highly recommended you make appointments to meet with your Senators and Representatives for the Lobbying portion of the day. Lobbying instructions and materials will be supplied to NAIHP members via email, prior to the event. Participants must register for this event. For more information contact us at: info@naihp.org.
Thank you for contacting the FHA Resource Center, a response to your inquiry is provided below. If you have additional questions you can submit them via email to info@fhaoutreach.com or contact us at 1-800-225-5342. Please do not respond to this email unless you need further clarification or wish to initiate a new service request.
FAQ : When a case number is transferred with a completed appraisal, may a new appraisal be requested?
Solution Details : When a borrower has switched lenders, the 1st lender must transfer the case to the 2nd lender upon borrower request. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.
? In accordance with USPAP, the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. The appraiser cannot 'readdress' (transfer) the original appraisal report to another party and must perform a new appraisal assignment in compliance with Advisory Opinion #26 and FAQ # 74 in the 2008-2009 edition of USPAP.
For cases assigned on or after January 1, 2010:
? A 2nd appraisal may be ordered by the 2nd lender when:
1. The 1st appraisal contains material deficiencies determined by the DE underwriter for the 2nd lender.
2. The appraiser performing the 1st appraisal is on the 2nd lender?s exclusionary list.
3. Failure of the 1st lender to provide a copy of the appraisal to the 2nd lender in a timely manner would cause a delay in closing, posing potential harm to the borrower. Potential harm includes events outside of the control of the borrower such as loss of interest rate lock, purchase contract deadline, foreclosure proceedings, and late fees.
For cases in 1 and 2 above, copies of both appraisals must be retained in the case binder. For cases in 3 above, the 1st appraisal must be added to the case binder when it is received. In all cases, the lender must document why a 2nd appraisal was ordered and retain the explanation in the case binder.
FHA prohibits appraiser shopping where lenders order additional appraisals in an effort to assure the highest possible value for the property and/or the least amount of deficiencies and/or repairs are noted and required by the appraiser.
ML: 09-29
Had there been a federal watchdog consumer protection agency on duty during the early years of this decade, could it have prevented the housing boom and bust that put millions of homeowners into foreclosure and sucked trillions of dollars of equity wealth from just about everybody else?
Nobody can answer that question. But when the House passed the massive Wall Street Reform and Consumer Protection Act on Dec. 11, Congress took the first step toward creating a national watchdog for homebuyers and mortgage borrowers for any future boom cycles.
The 1,279-page bill covers a vast amount of financial territory. But for ordinary consumers looking to apply for a home loan, what it says is this: Next time around, the federal government isn't as likely to be asleep at the wheel. You'll be less likely to encounter an environment where unregulated pitchmen and con artists can sell you loans requiring no money upfront, no documentation, hyped-up appraisals and payment plans that drag you deeper into debt.
Nor will Wall Street investment banks be allowed to chop and churn poisonous mortgages into destructive investments for the capital markets, even if the bonds are rated triple A by companies that see and report no evil.
For buyers, the core of the legislation is its creation of a new Consumer Financial Protection Agency, with broad powers to oversee and evaluate mortgages and equity credit lines offered by banks, mortgage companies, brokers and others.
Though no specific types of loans are prohibited in the legislation itself, the act almost certainly would limit or closely regulate mortgages that come with extra layers of risk -- teaser rates, adjustable payments, negative amortization, and options for borrowers to pay as little as they want per month.
The agency would also play a pivotal role in spotting discriminatory patterns in mortgage pricing, underwriting and marketing, from the steering of minorities and seniors into higher-cost loans to unfair denials of credit on racial or other prohibited grounds. It would essentially take over federal responsibility for the Equal Credit Opportunity Act and fair lending programs, and function as the go-to agency on unfair and deceptive trade practices in the financial arena.
On top of all this, it would monitor home real estate settlement practices such as under-the-table payoff schemes among realty agents, lenders, title companies, lawyers and others in exchange for business referrals. It would also get prime responsibility for making disclosures of loan terms to consumers meaningful and understandable.
The CFPA would have general oversight on home real estate appraisals and would be required to adopt rules and standards to guarantee "appraiser independence" from pressures by lenders, realty agents and others.
Once the revised appraisal rules go into effect, the controversial Home Valuation Code of Conduct mandated earlier this year by Fannie Mae and Freddie Mac would be terminated. That code has been widely criticized for leading to lowball appraisals and valuations by inexperienced appraisers.
Significantly, the legislation requires mortgage lenders to "compensate appraisers at a rate that is customary and reasonable for appraisal services" in their local market areas. This is a direct response to sharply reduced fees now being paid to many appraisers by "appraisal management companies" that have mushroomed under the Fannie-Freddie code.
The CFPA would have a full set of teeth: strong powers to subpoena, mount joint investigations with federal and state agencies, file lawsuits, seek damages, penalties and restitution. Its penalties could range from $5,000 a day per infraction to $1 million a day.
Consumer organizations and fair-lending groups generally welcomed House passage of the bill, while banks and mortgage industry trade groups tended to be critical, seeing the entire set of proposed reforms as regulatory overkill.
Travis Plunkett, legislative director for the Consumer Federation of America, said that had the new agency been in existence in 2001 or 2002, it "would have been collecting data and complaints from consumers very early on," and could have issued regulations restricting high-risk mortgages.
David Berenbaum, executive vice president of the National Community Reinvestment Coalition, said the act "is going to place consumer protection on mortgage and financing issues into the hands of a single regulator at the federal level," something that was absent during the rolling tragedy of the boom and bust.
On the sobering side, both Plunkett and Berenbaum said passage of final legislation is far from a sure thing. Action now shifts to the Senate, where industry lobbyists hope to either kill it or remove its teeth.
The Federal Housing Administration announced that it will delay until Feb. 15 the enactment of Mortgagee Letter 2009-28 and 2009-51 addressing appraiser independence and adoption of the appraisal update and/or completion report, respectively.
Originally planned for a Jan. 1 implementation, the 2009-28 guidance has two parts: the prohibition of mortgage brokers and commission-based lender staff from the appraisal process, and appraiser selection in FHA Connection.
In a Dec. 22 announcement, the FHA said the extension will provide the agency and lenders additional time to adjust systems to accommodate the changes to both ML 09-28 and 09-51. The agency said it would issue detailed instructions on changes to FHA Connection in a new mortgagee letter, but that the requirement for inputting the appraiser ID and the appraisal assignment date in the FHA Connection case number assignment screen will be removed. “Instead, lenders will be required to enter all appraisal data, including the appraiser ID, in the Appraisal Update Screen once the completed appraisal is received by the lender and prior to closing the loan,” according to the announcement.
All FHA Mortgagee Letters can be read online at www.hud.gov/offices/adm/hudclips/letters/mortgagee/ .
Texans have the opportunity November 3 to vote on several important constitutional amendments.
The Texas Association of REALTORS® is urging people to vote for Propositions 2, 3, and 5.
These amendments will help ensure that tax appraisals in Texas are fair to property owners and uniform from county to county.
An e-mail misinformation campaign has been circulating that makes false statements about Propositions 2 and 3. The e-mail claims that passing these propositions will allow the state to start taxing homeowners. That is complete fiction.
Here are brief explanations of what these amendments will actually do:
· Proposition 2 will require county appraisal districts to value a home as a home. Currently, appraisal districts can use the "best and highest use" method to value a residence based on its potential use. For example, a residence in a neighborhood zoned for mixed use could be appraised at a higher amount for its possible use as a commercial property.
· Proposition 3 gives the state the ability to make sure appraisal methods are consistent throughout the 254 Texas counties.
· Proposition 5 will make it acceptable for two adjoining appraisal districts to combine their boards of equalization if they wish—an option that rural counties may find attractive.
Don't let this misinformation campaign hurt the chances of passing these important amendments.
If you need additional background materials to share with other Texas REALTORS® and consumers, you can access a layman's explanation written by Texas Association of REALTORS® staff attorney Gabe Lopez.
You can also read the Texas Legislative Council's thorough explanation on all 11 proposed constitutional amendments.
Finally, feel free to download a promotional flier for Props 2, 3 and 5.
"The National Association of Mortgage Brokers (NAMB) states, there has been significant bipartisan movement forward by Congress on the Home Valuation Code of Conduct (HVCC) as a result of the phone calls made to your legislators in-district offices last week! Key Republican and Democrat Congressmen have shown their support for NAMB's cause, and we need to keep the momentum going. We can not stop now! NAMB wants you to contact your Senators and Representatives TODAY, and urge them to stop or delay the implementation of the final rule promulgated by the FHFA, which implements the controversial HVCC."
Reprinted w/o permission from www.fhaappraiserfinder.com
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