How does Cuomo go from pressing charges on E-AppraiseIT, a company owned by Fidelity, to implementing new guidelines with the GSES that will benefit large companies such as Fidelity (the very company the litigation was against)?

As all may be aware, Fidelity also owns LSI (Lender’s Service, Inc.) which caters to the nation?s top lenders and in my opinion is currently in bed with B.O.A. Are they truly disconnected and uninfluenced by the lenders? I say no way! In the past, I’ve received many shady back office emails sent to and from LSI to lenders with references to so called “under/over” valuations and pressure to meet lender quotas.

For lack of a better word, this firm “prostitutes” appraisers, basically collecting a large chunk of the fee and paying out a ridiculously low fee to the certified appraisers completing the work. If I’m correct, companies like LSI will exploit the new GSES guidelines and “rape” the appraisers financially.

Is this the price that appraisers need to pay to gain appraiser independence? If it comes down to sacrificing our fees, I will end my 10+ year career and seek work elsewhere rather than bowing to the forces that be and enriching unfair practices by firms such as LSI and those that will follow in their footsteps come January 1st 2009!!!!

I believe that the industry will loose many legitimate appraisers and be overrun by highly incompetent ?newbies? that will mislead the public and confuse the lenders even further. Good luck!

Bottom line, companies like LSI and others that wish to collect 50% or more of the appraisal fees for nothing more than their so called “quality control” review procedures which are nothing more than telemarketers running AVMS for ten bucks an hour should be shut down! A new more organized and truly disconnected solution should be implemented and funded by the GSES to obtain the goals that they intend in implementing the new guidelines.

I can go on and on, but I think you get the gist of it. Let?s get it together people! We are in fact talking about collateral risk not rocket science!

Good luck to us all.

Our complaint has been that a broker can order from anyone on the approved list, call to order and discuss the results! Well, that will be gone and the playing field will be leveled as it should be.

Bottom Line: so long as the rule applies equally to all market participants than who cares? Competitively no one will notice any difference and perhaps the greatest reigning in of the wild housing market will come in the form of “real”(?) appraisals, not product de-hancements or removal.
To those who still insist that is all related to Sub-Prime please note that FNMA,FHLMC aren’t really having a graceful walk in the park. While Sub-Prime lending and subsequently Alt-A lending were throwing money at anythnig with a pulse and a roof it needs to be noted that those FNMA 100’s and FNMA 95’s are now (in many, if not most) ares FNMA 110-120’s and FNMA 100-110’s.
Last note: Sole Prop appraisers would have the most to gain under this legislation as it would likely virtually guarantee bid placement to a certain pre determined nunmber every month. It would be like drawing a salary from a federal agency. They’re likely also the first to sign up as their business has been hit the hardest in recent months, so taken together this would be great from the Appraisers.
No more Bitching from the brokers (it is what is) and no more hassle from missed payments from borrowers (likely federal guaranteed payment system) pretty much win-win for them.
Stay Cheery!

?VI. In underwriting a loan, the lender shall not utilize any appraisal report prepared by an appraiser employed by:
(1) the lender;

(2) an affiliate of the lender;

(3) an entity that is owned, in whole or in part, by the lender;

(4) an entity that owns, in whole or in part, the lender

(5) a real estate ?settlement services? provider, as that term is defined in the Real Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;

(6) an entity that is owned, in whole or in part, by a ?settlement services? provider.

The lender also shall not use any appraisal report obtained by or through an appraisal management company that is owned by the lender or an affiliate of the lender, provided that the foregoing prohibitions do not apply where the lender has an ownership interest in the appraisal management company of 20% or less and where (i) the lender has no involvement in the day-to-day business operations of the appraisal management company, (ii) the appraisal management company is operated independently, and (iii) the lender plays no role in the selection of individual appraisers or any panel of approved appraisers used by the appraisal management company.
Notwithstanding these prohibitions, the lender may use in-house staff appraisers to (i) order appraisals, (ii) conduct appraisal reviews or other quality control, whether pre-funding or post-funding, (iii) develop, deploy, or use internal automated valuation models, or (iv) prepare appraisals in connection with transactions other than mortgage origination transactions (e.g. loan workouts).

Regards,
John McCormick

I would also say, it will not be the last of new changes in regards to Fannie and Freddie..there will be more to come and suspect not in favor of the brokers…

As I have said before the FNMA appraisals are by far the least offensive. The hard fraud is in the Alt-A and subprime market as we are seeing today. Combine an inflated appraisal, say even by a modest five or ten per cent, a declining market (average 9%) and a dead-beat borrower and what do you get!?

I’ve worked in true lender shops and they were significantly “dirtier” than any brokerage operation I’ve worked in. Anyone ever deal with Ameriquest??? As far as my operation goes, we always operated on the up and up. That was one reason for fleeing the lenders.

Also it is flawed logic to think front and back pricing had anything to do with the current crisis. The crisis is due to Wall Street and Ratings Agency’s fraud.

The fraud on the securitization level of the business allowed for the spread of the mortgage crisis that we are now dealing with. Thanks to them, we have a global economic meltdown.

There was always all types of fraud in this business. It never led to a credit crisis or global economic meltdown. Problematic fraud yes, but not on the scale to bring down the United States economy. That gives too much “credit” to the mom and pop brokerage industry.

Banks are finally getting what they wanted. They can’t compete head to head with low cost and nimble brokers, so the only option is to force brokers out of business with legal shenanigans. At the end of the day, it is consumers who will lose. All you retail loan officers at big banks, I hope you don’t mind working for $10 bucks an hour as a glorified telemonkey. You best believe the corporate strategy depts are going to figure out how to cut you out of the picture too. We can’t have LOs making more than the executives now can we? Better brush on your familiarity with India…

As an aside it is interesting to note that FNMA appraisal variances, statistically, are not much different from ten years ago. Most of their losses are from declining markets and condos. The real carnage is in the Alt-A and subprime mortgage market where most of the loans were broker originated. Cuomo’s deal does not yet affect this market.