Today’s housing industry is facing unprecedented challenges. New rules, regulations and laws, often created by a rush to judgment, are harming housing professionals, consumers, the market and the overall economy. NAIHP has identified several areas of concern and will be aggressively combating these issues. Below are some of those issues:

 

 

 

 FDIC Meeting and Information

August 9, 2011  

 

  

This afternoon, NAIHP met with the FDIC’s General Counsel’s Office. The purpose of the meeting was to discuss the FDIC’s issuance of repurchase demand letters to mortgage brokers. We found the FDIC staff to be open, cooperative and straightforward.

Recently, NAIHP had received a number of complaints from brokers, who were contacted by the FDIC with repurchase demands, or in some cases, actually being sued by the agency.

Prior to the meeting, it was widely believed the FDIC had singled out mortgage brokers for not only unjustified repurchase demands, but perhaps another government attempt at thinning the ranks of brokers.

Here’s what we learned during our 90 minute meeting: 

• Most of the cases involve defaults on either stated income or no documentation loans. Many are from 2004 and forward. The FDIC has jurisdiction, as the banks who funded the loans have failed.
• To date, the agency has moved forward with 142 actions, including issuing demand letters for repurchase and/or the filing of civil complaints. Some of these cases have already been settled. Until today, it was believed only mortgage brokers were being investigated. However, we were advised that brokers, appraisers, closing agents, attorneys, title agents, title insurance companies and others are included in the 142 actions.
• The FDIC is only pursuing cases that are “cost effective.” This is about recovering funds! Should a broker or any individual under investigation not have the means to repurchase, the case will not move forward.
• It was specifically mentioned, the agency is looking to recover losses by filing claims against E&O insurance policies or other assets, if available.
• FDIC staff advised NAIHP, this matter concerns only a handful of failed banks. Indymac, AmTrust and WaMu, were specifically singled out.

At the request of NAIHP, the FDIC will be issuing a letter, outlining the focus of their investigation and the criteria for pursuing claims. Once received, the letter will be posted.

In all cases where civil actions have been filed, the complaints read, “Negligence.” NAIHP reminded the FDIC; the failed institutions committed the negligence, as they had the tools available to prevent fraudulent loans from closing. Brokers and originators have long been required to submit signed IRS 4506/4506T forms with every file. It’s the responsible of the banks to submit these forms. Moreover, as a means of QC on brokered loans, banks don’t want brokers or originators filing the forms and submitting the documents to underwriters.

If you have received a letter from the FDIC or a law firm representing the agency, don’t attempt to handle this matter without first speaking to legal counsel. NAIHP members are entitled to 30 minutes of free legal consultation each month, as a member benefit. In addition, we have partnered with the Law Offices of Herman Thordsen, Esq. to assist our members with this and other regulatory issues.

If you have any questions, please email us at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Further updates will be available at  www.naihp.org in the coming days 

 

 

 

CFPB Meeting 

 

  

Yesterday, NAIHP met with the CFPB to discuss two sections of the Dodd-Frank Act, LO Comp and Appraiser Independence. Concerning the appraiser issue, they were well aware of the “unintended consequences” of HVCC and asked what changes we thought would fix the problem. We offered solutions, along with substantial supporting documentation.

 

We also discussed in detail, regulations that destroy competition and increase consumer costs, all in the name of consumer protection. When asked about the continuation of the Fed Rule, once CFPB began operations on July 21^st, they stated, every rule and regulation “will be looked at with “fresh eyes.”

 

CFPB wants to have a continuing dialog with NAIHP and invited us back next week for another meeting.

 

It’s been a long time since we’ve met with an agency that didn’t already have their minds made up, before a comment period was over. Hopefully, this is the start of common sense regulations that level the playing field for consumers

 

Urgent Message to ALL Appraisers

   

Recently, LandSafe released its latest “Appraisal Service Agreement,” which requires signatures from LandSafe appraisers.  This 21 page document goes further than ever before in its attempt to get LandSafe appraisers to willingly agree to certain terms and conditions. 

The agreement includes, but is not limited to, terms regarding representations and warrantees of the appraiser, indemnifications of LandSafe, fees, audits, mandatory training, dispute resolution, and rights to the appraiser’s work product, among others.

It is highly recommended that no licensed appraiser agree to these terms before consulting with an attorney.  The impact of signing this agreement is substantial to the appraiser, to say the least, and it is advisable to fully read and understand the implications of signing the agreement.  Please note appraisers have the right to refuse to sign this document, thereby rejecting what could be harmful terms.   Appraisers need to stand together on this issue!

We believe this agreement may be a “trial balloon” for other Appraisal Management Companies. Others may follow LandSafe’s lead and produce their own versions of “appraisal service agreements” in the near future.  It is incumbent upon every licensed appraiser to take the time to educate themselves, consult with other appraisal professionals and seek legal counsel, to fully understand the personal and professional impact of signing any such agreements.

 

Thanks, Ian Coates

NAIHP Vice President

 

 

March 29th Fed Hearing Update

 

FED Rule:  Update: March 29, 2011

 

Sorry for the delay in updating everyone, but I just returned from the hearing in Washington. Thanks to Fred Glick for our preliminary update.

As you know, on Friday, March 25th, NAMB filed a Motion for a HEARING on their request for a Temporary Restraining Order (TRO), in US District Court, with respect to NAMB v. Board of Governors of the Federal Reserve System (Board). That hearing request, on their single issue was granted and then expanded to include NAIHP and the entire consolidated case. As you are further aware, NAIHP had preferred to let the Judge rule on the record, meaning our complaint, the Fed’s answer and our response to that answer. After today’s hearing, our position remains the same.

This morning at 9:30AM, a hearing was held in Washington. In attendance were counsels for NAIHP, NAMB, The Fed and the Community Mortgage Bankers Project.

The hearing started out with the Judge questioning NAMB’s attorney about their Motion for a TRO. Judge Howell asked the attorney, if he really wanted to continue with the TRO, as it couldn’t be appealed, if she were to rule against him. She further questioned if he wouldn’t rather concentrate on a Preliminary Injunction (PI). NAMB’s counsel agreed.

Next up was Stephen Hill, counsel for NAIHP. Mr. Hill did a great job of walking the Judge thru the entire case, with special emphasis on the Fed’s lack of authority, flawed studies, certain admissions by the Fed and the irreparable harm the rule would create for brokers and originators. The Judge seemed to be particularly interested in the Fed’s authority issue and the Fed’s testing.

NAMB’s attorney then proceeded to advise the court of their complaint and the dangers it posed to brokers. His remarks were basically limited to their issue.

It was now time for the Fed to address the court. The Fed was represented by 6 attorneys, including Paul Mondor and Nikita Pastor. You will remember they were the attorneys who moderated the Fed Webinar on March 17th. However, only Attorney Wheatley addressed the court. As expected, the Fed took their second bite at the apple, with special attention to their authority. The issue with their 2 studies was also raised. As you know, the Fed is relying on these studies as the basis for the rule. In their paper answer, they presented a weak case. Their courtroom version was no different. At one point, it appeared their attorney stopped defending the studies by saying, “We have lots of other studies too.” They may have them, but as they were never part of the record, they don’t count.

The last group to speak was counsel for the Community Mortgage Bankers Project. They did a great job of defending the plaintiff’s position.

It’s important to note, the Judge fully understands the issues and asked very direct questions from all sides. Because she “tested” all the attorneys, it’s difficult to read how she’s leaning. Any speculation on my part would be wishful thinking.

The hearing ended after 2 ½ hours with the Judge promising an answer “shortly.”

As soon as we hear, we’ll update you immediately.

 

Thanks, Marc

 

 

NAIHP's Final Brief (Response) to FRB.  Click Here

 

 

NAIHP calls for Congressional Investigation of Fed Practices

Click Here

 

 

NAIHP thanks all those who have contributed to the legal fund against the Fed.

For the past few months, we have been carefully preparing our case to stop the Fed’s illegal rule on loan originator compensation. We have retained the Washington, DC law firm of Howrey. This firm has a long and successful track record of taking on the Federal Government.

A case as important as this one requires substantial research and planning, in order to have a successful outcome, which is what our team has been doing for the past few months. As frustrating and stressful as this issue has been, it’s not something you can rush and put together in a few days. We have one bite at the apple and need to make sure we do it right the first time.

NAIHP anticipates our suit will be filed within the next ten days. As mentioned in previous announcements, our first order of business will be a temporary restraining order (TRO), to stop the April 1^st implementation.

NAIHP asks that you continue to contribute to the legal fund. Remember, we guarantee every dime of your contributions will go to the legal action, and any unused portion of the funds will be refunded on a prorated basis.

 

 Contribute Here

 

 

    SBA Requests Fed to Delay Rule on Originator Compensation

Dear Chairman Bernanke and Director Braunstein:

I am writing in reference to the Board of Governors for the Federal Reserve (Board) final rule on Regulation Z; Docket No. R-1366, Truth in Lending, which implements regulations for loan originator compensation and steering.   Advocacy is concerned that the Board may not have published a compliance guide as required by the Small Business Regulatory Enforcement Fairness Act (SBREFA).     Advocacy recommends that the Board publish a compliance guide in the immediate future and extend the time for small entities to comply to reflect the delay in the availability of the guide. 

Read More

 

    The Fed Rule on            

Originator Compensation

 

 

NAIHP is aggressively fighting this anti-competitive, anti-small business rule. Our legal team is finalizing our position and preparing to file legal action against the Fed, should the FRB not withdraw the rule.

 

NAIHP has always believed this rule was dangerous and needed to be stopped. Our position has never changed, since the day it was originally proposed in August of 2009. For over a year, we tried working with the Fed to make changes, but that effort failed.

 

In recent weeks, NAIHP has held several high level meetings with various agencies, including the CFPB, Elizabeth Warren, the Financial Crisis Inquiry Commission and numerous legislators. Between now and Christmas, we will be meeting with additional agencies, along with two incoming Congressional Committee Chairs.

 

Our position is clear. The FRB lacks the authority to restrict compensation. Moreover, the testing for this rule was seriously flawed and limited. The rule picks winners and losers, in that it eliminates competition, which increases costs for consumers and creates more business failures for small business.

 

In addition, with the passage of the Dodd-Frank Wall Street Reform Act, the FRB should have withdrawn their proposed rule, instead of finalizing it. This action by the Fed, showed a complete disregard for Congress and gives support to those who believe the FRB is a secret agency, who acts without oversight.

 

NAIHP will be updating this page weekly, or as events happen.

 

 

 

Comment Period

 

Federal Reserve Board’s Interim Rule on

Appraiser Independence

 

This rule concerns “customary and reasonable fees”for appraisers, as well as other HVCC type issues that concern ALL housing professionals.

 

We can’t stress enough the importance of commenting. TAVMA and AMC’s, who want to delay implementation of customary and reasonable fees, will be commenting. Let your voice be heard!

 

Deadline to comment:  December 27, 2010

 

We urge all housing professionals to comment today and NOT wait until the end of the comment period. Furthermore, forward this announcement to your database of professionals and post on social media sites.

 

How to Comment: 

Be sure to include the following:  Docket No. R-1394and RIN No. AD-7100-56

 

Instructions for submitting comments via the FRB’s website.

http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm

 

Instruction for submitting comments by Fax:

Include docket number in subject line.                 

Fax 202-452-3819 or 202-452-3102

 

Direct Mail:

Mail to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System,              20^th St and Constitution Ave., N.W., Washington, DC 20551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It’s NOT over yet!

 

Financial Reform Legislation in doubt.

 

Financial reform legislation may be in jeopardy. Once the Senate begins debate on the compromise bill, it needs 60 votes to end that debate. The Senate began the process with 59 votes. Due to the passing of WV Senator Robert Byrd and the announced “NO” vote of Democrat Russ Feingold, the majority is down to 57 votes.

 

Republicans who previously voted in favor of the bill, prior to conference, are likely no votes. However, deals will be offered on both sides to gain support. Therefore, we ask that you call your Senators and tell them to vote NO! Explain how this bill will harm consumers and your business.

 

Link to Senate contact information:

 

 

 

 

NAIHP calls on FHFA to withdraw HVCC guidelines, due to findings of the MARI Report on fraud.

 

On May 5, 2010, NAIHP President Marc Savitt, wrote to FHFA Director Edward DeMarco, asking that the Home Valuation Code of Conduct (HVCC), be withdrawn. “I'm sure by now you've seen the MARI report on mortgage fraud, specifically the section on appraisals. If not, a copy is attached. As you will note, appraisal fraud has increased sharply in 2009. Additional, the quality of appraisals have dropped significantly.”

 

“In every one of our 7 meetings with your agency, we predicted this exact same scenario. HVCC does nothing to reduce fraud or conflicts of interest. It does however, cause substantial harm to consumers and small business. It is for these reasons, we ask the FHFA to immediately withdraw the HVCC guidelines.”

 

HVCC Update:  April 14, 2010

NAIHP's Rally and Lobby Day was successful. While members visited the offices of their representatives, leadership met with Rep. Travis Childers, who pledged to work with us to nullify HVCC. Rep. Childers revealed his plans for including the Childers/Miller/Bachman/Manzuello amendment in the appropriate bill. We also met with the offices of three U.S. Senators. Additional meetings are scheduled within the coming days.

Federal Reserve Board Meeting:  April 13, 2010

NAIHP met with the Federal Reserve Board to discuss the FRB's proposed rule on loan originator compensation. The scheduled 30 minute meeting lasted almost 90 minutes, but failed to produce any positive results. NAIHP is currently working with legal advisers to discuss "options." Watch for additional updates.

March 5, 2010

NAIHP President Marc Savitt and VP Ian Coates, met with the office of Senator Tim Johnson, (D-SD). The meeting centered around NAIHP's HVCC Proposal and their overall "Main Street Solution." The Proposal, developed in cooperation with Brokers, Realtors and Appraisers, enhances existing language in HR 4173, which passed the House of Representatives in December 2009. The Senate is currently working on their version of this legislation.

"Our HVCC Proposal gives Senators an additional comfort level with respect to legislation nullifying HVCC, according to Savitt."

On March 4, 2010, Savitt and Coates met with FHFA General Counsel Alfred Pollard (regulator for the GSE's) and discussed the NAIHP Proposal. (More about this meeting later).

Since May of 2008, one full year before the implementation of HVCC, Savitt has met with the NY Attorney General's Office 5 times, the FHFA 7 times, Fannie and Freddie twice, along with numerous Members of Congress. He has also testified twice before Congress on this issue. Marc has appeared on numerous cable news shows and has been interviewed by the press countless times in his campaign to end HVCC and the harm it creates to consumers and small business professionals.

Be sure to join NAIHP and help build one of the largest grass roots organizations.

Click the "Join Now" button to the left and become a member.

 

• The Home Valuation Code of Conduct (HVCC).
• Federal Reserve Board Proposed Rule on compensation.
• FHA Proposed Rule.
• Excessive consumer fees charged by Fannie and Freddie.
• Senate version of the Wall Street Reform and Consumer Protection Act of 2009. (HR 4173)
• FRB comment letter signed by 18 Senators seeking YSP ban.
• RESPA Reform.
• FHA Commissioner David Steven's 9/08 Congressional Testimony on RESPA Reform.
• Borrower’s Right to Inspect Closing Documents Act of 2009

We invite our members to comment and make suggestions about these and other issues. Please write to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it . We want your input. We understand the importance of communicating with our members. Members will be kept updated via video emails and the Members Only Section. If you’re interested in joining our GA Team, please email us.