Appeal from NAMB President Marc Savitt
Marc was a featured speaker at AAMB's June 10 conference where he rallied the troops with updates about legislative threats at the Federal level. Marc wraps-up his term as president on June 30 after a year of providing clear leadership, tireless energy and a clear vision during a difficult year. His efforts are to be commended.
To: All Mortgage Brokers, Real Estate Agents, Appraisers, Lenders, Home Builders, Title Agents, and Consumers
From: Marc Savitt, President - National Association of Mortgage Brokers
After more than a year of exhaustive negotiations with Fannie Mae, Freddie Mac, Director of FHFA (GSE Regulator) James Lockhart, and NY Attorney General Andrew Cuomo, NAMB believes the time has come for your individual voice to be heard.
In order for this “Call to Action” to be effective, we ask that you fully participate, encourage others to join the action and continue calling and emailing everyday, until advised to stop by NAMB. This will NOT be a one day action!
We have received hundreds of e-mails through the hvcc@namb.org e-mail
address outlining specific cases where the HVCC has created delays and
additional costs to consumers. NAMB has categorized and compiled a report of the
examples received, which was sent to FHFA Director James Lockhart. Please use
your own examples in your conversations with legislators, regulators, or their
staff. Also, please visit the NAMB HVCC Resource
Center for additional information and documents on the HVCC.
Who will you be contacting?
NY Attorney General Andrew Cuomo’s Office: (212) 416-8000, Internet
Complaint
Federal Housing Finance Agency (FHFA): (866) 796-5595,
director@fhfa.gov
Fannie Mae: (800) 732-6643
Freddie
Mac: (703) 903-2000, Internet
Complaint
Senators, Representatives and Governors: Click here for contact
information.
Also, please contact your local TV and Newspaper
outlets.
Below are talking points and background information to assist in
your conversations. Please remember we are all professionals and should conduct
ourselves accordingly in any communication with the above parties. For the most
successful and influential calls, it is important to concisely quantify how the
HVCC is affecting your consumer and your business.
Talking Points:
1) NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.
2) Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.
3) AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.
4) HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.
5) No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.
Background:
I. Lack of Portability
A.
Lenders are not allowing borrowers to transfer appraisals, regardless of the
reason.
B. Forces the borrower to pay for another appraisal and wait
for a new appraiser to be assigned and complete it, increasing the total cost
and time needed for obtaining a home. Delays in turnaround times also cause the
borrower to miss rate lock deadlines and possibly face penalties charged by the
lender.
C. In a poll conducted by NAMB, 75.8% of respondents said that
0% of their appraisals are portable since the enactment of the HVCC.
II. Lack of Quality
A. AMCs
are assigning appraisers from a different municipality, county, or even state to
appraise the target house, therefore unfamiliar with the neighborhood and unable
to produce an accurate appraisal.
i. Because of this, the
HVCC is forcing appraisers to be in direct violation of the Uniform Standards of
Professional Appraisal Practice (USPAP) for jurisdictional competence.
B. Because AMCs pay appraisers such low fees, those assigned appraisers
willing to do the work are often inexperienced and fail to adequately appraise
the home.
III. Increased Cost of
Appraisals
A. The minimum increase we have seen
in direct consumer cost is $150 per appraisal. That, coupled with the
drastically increased appraisal turnaround times that impose extended lock
periods at an average expense of $561.95 per loan, is now costing consumers an
estimated additional $711.95 per transaction.
B. $150.00 - minimum
increase per appraisal
$561.95 - average loan amount of $224,778 at
.25% for extended lock period
$711.95 - average total increase per
transaction
x 3,870,552* - 2007 HMDA report of residential real estate
loans originated
$2,755,639,496 -
$2.8BILLION in increased fees to consumers!
IV. Articles Illustrating the Effects of
the HVCC
A. The
Appraisal Bubble – The Center for Public Integrity
B. The
Cure is Worse than the Disease – Appraisal Press
C. Appraisals
Roil Real Estate Deals – The Wall Street Journal
i. Feel free to forward these articles and/or reference them in
your conversations.
<End of Message from Marc Savitt>
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HVCC has only increased the cost to my borrowers by more than $150.00 when you include investment properties, that cost is even higher, this is outrageous. The lack of portability has caused another tremendous cost as well. I had a borrower pay for three different appraisals before we closed their contract at a cost of $1689.00 to them when the total costs should have been no more than $550.00
Posted by: Rogelio A. Inzunza | 06/24/2009 at 02:25 PM