Media Center
Federal Reserve Board Releases Interim Appraiser Independence Rule
The rule does NOT prohibit mortgage brokers, or loan originators from ordering and compensating appraisers directly. Fannie and Freddie have retained the broker "lock-out" provision in their revised guidelines.
Once this interim rule is published in the Federal Register, a 60 day comment period will begin.
Click Here for a copy of the Interim Rule
Click Here for the TBWS 10/19 Daily Show
How much more proof do you need?
A message from NAIHP
On August 17, 2010, Bankrate reported, closing costs jumped 36.6% year over year, (2009-2010). Link
For the past few years, Congress and several federal agencies, have been imposing new rules, regulations and laws, all designed to reduce real estate closing costs and protect consumers from being steered into more expensive loans.
Recently, the Federal Reserve Board (FRB), finalized a new rule on originator compensation. According to the FRB, the rule affects “all originators.” It specifically mentions originators who work for brokers, broker businesses and originators that work for banks. However, banks (as a business), were exempt. Once again, it appears our government is in the business of picking winners and losers. Originators and broker businesses have expenses too. It’s not all about profits. Moreover, many of these expenses were created by the government, IE: The Safe Act.
Some have “applauded,” or are “satisfied” with the new rule, because it includes “all originators.” I’ll let you draw your own conclusions as to why these statements were made. However, if you’re a broker, or an originator, you understand there’s nothing to applaud about, or be satisfied with.
A few years ago, brokers originated almost 67% of all residential loans in this country. Last year, that number dropped to about 17%. This huge reduction can be attributed to a campaign to blame brokers for the housing crisis and the over regulation of the brokerage industry. These factors created substantially less competition, which is directly related to the increase reported by Bankrate. Another factor is the government itself. Government is the biggest offender of steering, by way of the implementation of rules, regulations and laws that favor the deep pocket, industry participants.
Competition reduces consumer costs, NOT Financial Reform, RESPA Reform, or FRB Rules. HUD claimed RESPA Reform would reduce a borrower’s closing costs by $700.00. That never happened! Need more proof, look at HVCC. Consumer costs increased, along with valuation fraud.
NAIHP pledges to continue fighting for restoration of a competitive market place and level playing field for all consumers.
Marc Savitt, President
NAIHP
Take the Survey!!
“Customary and Reasonable Fee Survey”
NAIHP fully endorses this survey and encourages you to take 5 minutes and participate. We also request you forward this message to your database of all housing professionals, including Appraisers, Real Estate Agents, Originators, Lenders, etc. and ask them to take the survey.
A message from Tinna Morlatt and Bill McKnight of "The Appraisal Show."
Dear Industry Professionals—
As the new legislation begins to take effect and regulators begin the process of writing new regulations regarding Appraiser Independence, we at The Appraisal Show have developed a Survey for Customary and Reasonable Fees. http://www.theappraisalshow.com/
The law outlines that evidence for customary and reasonable fees may be established by objective third-party information such as a private sector survey.
We have created an independent, non-biased survey that doesn’t limit participation. In fact, we encourage all housing industry professionals to participate. In addition, we are requesting your organization’s endorsement of this industry survey.
Our goal is to accumulate non-biased statistically relevant information in order to set a credible benchmark for customary and reasonable fees. We need your endorsement to do that. The greater the volume of participation, the more accurate the statistical data will be.
Your endorsement will be added to our survey’s endorsement site and we also request that with your endorsement you send your members a message asking them to participate in the survey as well. The survey can be found at http://www.theappraisalshow.com/
Thank you for your participation and endorsement—
Tinna and Bill, "The Appraisal Show"
Take the Survey and support your housing industry!
Financial Reform…the next step!
The Financial Reform bill has passed both the House and Senate. The President is expected to sign the bill into law on July 21, 2010.
Many of you have asked when these new regulations will go into effect. We’ve been told, 12-18 months. The new regulator must first be established, which includes a Director being confirmed by the Senate. In addition, the new “bureau” must write rules and regulations.
NAIHP will be part of the process during rule making. Our intent is to provide input, to correct some of the issues, which will cause harm to consumers and small business.
Updates will be posted as events happen.
Thanks, Marc
Update: Financial Reform Conference Committee
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:
Despite personal assurances of being committed to fixing an injustice created by NY AG Andrew Cuomo, the House allowed retiring Senator Chris Dodd to have his way. (Most of you know why Senator Dodd is retiring).
The compromise on the broker issue was “portability.” In my opinion, real portability has as much chance of happening, as appraisers receiving “reasonable and customary compensation," it won't!
What Congress fails to realize is nothing will change after the HVCC sunsets. Brokers are still out, banks and their conflict of interest partners, the AMC’s, will still control the valuation process in this country. Appraisers “may” receive higher amounts of compensation (and we’re happy about that), but does anyone think for one minute the banks and AMC’s will give up one dime of profit? The consumer’s cost of home ownership just went up again, courtesy of the US Congress. The same issues highlighted in the MARI report will still continue. Appraisal fraud will increase, quality of work will decrease and the banks and AMC’s will get richer.
I want to thank all of the individuals, who worked so hard to defeat the HVCC. I appreciate the sacrifices you’ve made. It was an up hill battle against Cuomo, the GSE’s, Congress, the banks, the AMC’s and other trade associations, who should have been in the fight, but cared more about their associations than the industry.
Thanks, Marc
Originator Compensation: Also included in title 14, was language concerning limitations on originator compensation. The 3% safe harbor provision was offered by the House and accepted by the Senate.
One important, positive change for originators was included. The original Merkley amendment included language that required a 1% deduction from the originator’s compensation (safe harbor), for any up front mortgage insurance or guarantee. NAIHP was successful in having that section changed. Here’s the change…‘‘(II) includes any premium for mortgage guarantee insurance that is not provided by an agency of the Federal Government or an agency of a State and is paid by the consumer at or before closing.” (page 1808).
This means, if your loan is FHA, VA or USDA, you don’t count the 1% against the 3% safe harbor.
HVCC Update
I was briefed today, by the House Financial Services Committee on the HVCC sunset. The original language in section 4312 is now in the base text. This means we’ve made it to a vote. The vote will most likely come Tuesday 6/22.
The question is, what about the Senate? I was informed a short time ago, the House made an offer to the Senate conceding a major issue, but insisted the HVCC sunset remain “as is.”
As Yogi Berra says, “It ain’t over till it’s over.” However, NAIHP spent all of last week and today on the Senate side, making a final push for the sunset. We feel the Senate supports the appraisal industry.
You can watch the conference committee live tomorrow on c-span…starting at noon eastern.
Compensation Issue
NAIHP has been working with several state mortgage associations on this issue. We’ve made two offers of compromise to both the House and Senate. Our recommendations (see below), are now under consideration.
1) Increase safe harbor from 3% to 5%, in combination of direct and/or indirect compensation. None of us like caps, but 5% has worked in most states for consumers and industry.
2) Exempt conventional, jumbo and government loans from the safe harbor.
FYI: NAIHP was successful in excluding the 1% deduction from the safe harbor for government insurance or guarantees.
NAIHP will keep you posted as events happen tomorrow.
Urgent
Call to Action
Attention all Mortgage Brokers and Originators
For years, mortgage professionals have participated in Calls to Action to their elected officials. Unfortunately, most “actions” have been ineffective. Why? Because you’ve been calling the very individuals who were either creating the harm to consumers and industry, or were in a helpless minority position.
This Call to Action will take a different approach and generate media attention to expose the potential harm awaiting consumers.
BACKGROUND: Earlier today, during the conference committee debate on the Financial Reform Bill, House Financial Services Committee Chairman Barney Frank stated without equivocation, “The bill bans yield spread premiums.” Despite the fact the bill in its current form does NOT ban YSP; Chairman Frank’s statement makes his intention clear.
GET OFF THE SIDELINES! Everyone and we mean everyone needs to participate in this action. In addition, you need to call your business associates (Realtors, builders, appraisers and other housing professionals), and urge them to participate as well. Failure to take part in this action may cause you to lose your livelihood!!!
HERE’S WHAT YOU NEED TO DO: Call and Email: Sean Hannity at Fox News.
Phone: (212) 301-3000 (Select option 3)
Email: