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NAMB Files Lawsuit Over HVCC

Frank Gregoire’s Blog, Appraiser Active, has an interesting post up on the National Association of Mortgage Brokers attempt to prevent the enactment of the Home Valuation Code of Conduct:

The National Association of Mortgage Brokers (NAMB), with the support of Baker & Hostetler LLP, filed a lawsuit today with the United States District Court for the District of Columbia against the Federal Housing Finance Agency (FHFA) Director James B. Lockhart over the controversial Home Valuation Code of Conduct (HVCC) included in the appraisal agreements between the FHFA, Fannie Mae and Freddie Mac (GSEs), and New York Attorney General Andrew Cuomo.

“The HVCC does nothing but drive up costs for consumers and push small businesses out of the market,” said NAMB President, Marc Savitt. “The HVCC will drastically reduce the ability of mortgage brokers to provide consumers with an efficient and cost-effective means of obtaining a mortgage.”

It will be interested to see how this plays out.

You can access the Lawsuit by clicking here.

Comments
  1. I am a Real Estate Broker and a Certified Real Estate Appraiser with over 20 years experience. I have never seen anything as crazy in my years in the industry. So let me get this straight, A lender, Washingotn Mutual, and a management company, First American EAppraise-it, pressure appraiser’s to hit their numbers by inflating values. Washington Mutual is the largest bank failure in US history and Eappraise-it pays a large fine. Fast forward, NY Attorney General is Andrew Cumo is instrumental in creating the HVCC that says in effect that lenders must use Management Companys to order appraisals. Sounds to me like this is what caused the problem to begin with. A management company pressuring appraisers to inflate values. Go figure, the new rules created by the HVCC is the same secnerio what started the problem to begin with. Sounds like the fox guarding the hen house to me. Banks and AMC’s stealing the appraiser’s fees and setting their own values through pressuring appraiser and basically destroying the appraisal industry by forcing qualified, independent fee appraisers out of business and ending up with appraisers who are incompetent and cannot make it on their own by providing quailty work. When the AMC’s call me they ask ” how quick can you get the appraisal back and how low of a fee will you charge?” Just what we need in this unstable market, an appraisal that is not worth the paper it is written on. Mortgage Brokers and Appraisers must stand up and fight the HVCC. It is big banks taking over the valuation process further eroding the banking system. But that does not matter, the government will bail them out with our money, if we are not all unemployed. And one more thing, banks can now own a 20% of less stake in the management companys. Go figure!

  2. Jim Dunn

    Personally, I believe Cuomo should be personally sued- it turns out one of his good friends is/was an owner of an AMC when this law suit came down. We’ve seen other AG’s in NY act holier than thou, only to be found to be hypocrites (Spitzer).
    The NAMB has a good point regarding appraisal costs, AMC gouging, etc. but the real crux of this issue is Cuomo’s conflict of interest. The attorney’s ought to be looking into this more aggresively.

  3. Scott Drescher

    It’s time that REALTORs stop standing idly by when industry groups line up against consumers. HVCC is a case in point. Why isn’t NAR lining up to support the appraisal industry? It’s the same as when builders gouged consumers with their “incentive penalties” that offered bogus incentives to use their in-house mortgage companies and NAR did nothing to stop it. It’s time our association steps up.

  4. Edward Hadnott

    The real issue here is integrity. Countrywide, and Washington Mutual have both been caught with their hands in the cookie jar. The only fair system is to adopt the VA Appraisal System. Where every appraisal is assigned on a rotating basis and every appraisal is reviewed. I agree we cant trust banks or mortgage companies to undermine the appraisal industry.

  5. Thanks for all the comments! Now where do we go from here? I agree with Edward Hadnott! The VA Appraisal System WORKS!

  6. Steve Timper

    The VA Appraisal System does not work because they do NOT let new appraisers in their system. I am an AR that has been appraising for 15 years, and they will not give me ANY appraisals, and I am FHA approved.

  7. Melissa Park

    I have been appraising for over twenty years, and have been very fortunate to work for ethical clients who do not pressure me for values. The only AMC I have had the misfortune to do work for cut my fees, did not give me time to produce a quality appraisal, and put more pressure on me to “hit their number” than any client ever had. It was a very short relationship. Bottom line, Mr. Cuomo, you can’t legislate honesty and this Code of Conduct will make things worse, not better.

  8. I am a Real Estate Broker and Certified General Real Estate Appraiser and have been for the last 23 years. This HVCC is a travisty. No only is it a restraint of trade. But many of us have spent years building a business. Only to have some smug NY Attorney General for his own political gain and greed destroy it. We have no say in the matter. My husband and I have never worked for an Appraisal Management Company, but my husband was put on Quantrix a Management Ccompany used by Chase Manhattan (without his knowledge). They kept assigning him jobs for a very low fee. He tried to change the fee schedule noting that we charge according to the complexity of the appraisal. They said we could only charge a fee by “VALUE”, ie, $450,000-500,000 would be one fee and for $501,000 to 550,000 would could charge a higher fee.(This is a USPAP voilation and has been since licensing in 1992) We spoke to the manager of the Management Company and she said didn’t care if she was in violation of anything. She said if you don’t want to work for their fees then she would take him off the list. This method of charging fees is in violation of “USPAP”, but guess what no one is regulating the Management Companies. These companies are charging consumers too much money and it is not necessary to use them. Washington Mutual and Countrywide are to blame and they have the worst Management Companies. Thank you NAMB, I donated $500 to their suit and I recommend to everyone to please donate what they can.The banks have caused alot of the problems and are difficult to deal with on the real estate end with Short Sales & Foreclosures. To give them any more power will only hurt the consumers more and slow down the recovery we are all hoping for in this marketplace.I hope NAR jumps on the band wagon and does something on behalf of Realtors as this affects them as well.We can’t guide our clients to the best options out there if the banks are the only game in town. Watch how that drives up the fess that they can charge to consumers.

  9. Dave Mehta

    Again I hope NAR takes some stand for salespeople. The inefficiency of banks & assesst managers have created problems in housing industry.
    I hope this time NAR puts resources towards the problems in housing industry (unreasonable addendums from banks, absolute control and unreasonable demands from assest managers & Listing agents) instead of only worrying about PAC.
    D M.
    Michigan
    Dave Mehta

  10. Raymond Finocchio

    In 20 plus years in retirement planning, real estate and mortgage lending I have never seen more corporate greed and government waste. When will we learn from history. Bigger is NOT better and absolute power absolutely corupts the markets. These banks are in trouble because of the leveraged trading and the insuring of low quality mortgages to make them “investment grade” allowing banks mutual and pension funds to get in the game at a riskier level that they would have been allowed to if there existed ANY real regulation. It’s time to break up the Top 5 banks like they did with the phone companies. There are good and valuable business units in all these banks and we need to separate them from the current management, then provide support for depositors. Once that is done we can see what we have in these portfolios and only bail out actual foreclosure losses on primary residences not depleted value due to what is a distorted reduction in the value of the collateral. Many of the speculators are on their 3rd or 4th turn on the wheel and made large profits in these over appreciated areas. Let them and the traders bear the losses as they reap what they sowed. Then the banks will not be in such a hurry to write down the mortgage portfolios since most of this is an unrealized paper loss if it is separated from bank depositors assets. Anyone who cashed in on a million or more bonus at the investment houses banks and especially the portfolio insurers like AIG, should be subject to civil and criminal action if appropriate.

  11. Stanley L. Reaney

    Per Mr. Marc Savitt,the HVCC will drive up cost and push small mortgage brokers out of business. Hey, Mr. Savitt, do we ( appraisers ) quote your points that you and your bunched raped consumers on many fraudlent loans. The problem is Crooked Mortgage Brokers, and there are many and Crooked Appraisers who are in the back pockets of many Mortgage Brokers.

  12. Michael Mandis

    The HVCC will do nothing but kill deals and cost the consumer and everyone involved in the transaction more money, the Borrower, Realtor, Lender, Title Company more money. The only one who wins is the Appraisal Management Companies.
    Hmmmm? Follow the money, and the closer you’ll get to Cuomo.

  13. Guy McDonald

    HVCC: What Does it Mean to Appraisers?
    After reading this article, in Valuation, I am truly amazed. Amazed at how the appraisers in this article are either uneducated, uniformed, or just plain stupid. The comments by the appraisers and so call industry professional such as Bill Garber, I honestly say, need to ask are they even familiar with the HVCC? All of the comments illustrate the lack of intelligence by those who stand by smiling and acting as if anything positive will come of the HVCC.
    As an appraiser, I am fortunate to be somewhat diversified between, brokers, lenders and litigation. But this will impact all appraisers. For those that are saying “broker pressure” will be removed, I can only say be careful what you wish for because you just might get it. And in this case you got. You will now see your requests from brokers drop to zero. And if you attitude is “good then, no more broker pressure” you have already check your ethics at the door and should not be in this field to start with. I have had several occasions when a broker wanted a higher value. I simply said no. And when they threatened to take their business to some other appraiser who would lie for them, then I’d wish them good luck. Oddly enough after a year or two, the same broker would come back around after their “other” appraiser was placed on one too many “black list”. So again, if you can’t stand up to “broker pressure”, you shouldn’t be in the business.
    As for the HVCC, does anyone know how this came to be? Anyone? Bill Garber? The HVCC came about because Andrew Cuomo filled a lawsuit against WASHINGTON MUTUAL and EAPPRAISE IT because WASHINGTON MUTUAL was putting pressure on EAPPRAISE IT to either obtain value or higher appraisers that were able to meet the needed value. Now what stands out with this? Bill, any idea? WASHINGTON MUTUAL IS NOT A BROKER!!!!!! Andrew Cuomo then took aim at Fanny Mae for accepting such loans. Lets not forget Andrew Cuomo was once the director of HUD and knew all to well what was going on long before any of this came into the light. Now not ONCE were the brokers listed in the original lawsuit. Not even in the second revision of the HVCC. What happened in the third revision of the HVCC? All of the blame was placed squarely on the brokers. Why did this happen? Why would Andrew Cuomo have such a change in heart for the lenders that were originally named in the lawsuit and blame a completely separate group of people? And with regard to the way the system is currently set up, even if an appraiser bowed down to an over pressuring broker, the lender does have this thing called an UNDERWRITER. Do I need to explain what an underwriter does? Anyone on board with the HVCC should have some sort of competency test or have their ethics re-evaluated as they have sold out. And to hear such comments from members of the Appraisal Institute should prove the Appraisal Institute should be discontinued as they are only around to echo whatever the corrupt lenders feel like shouting out to the masses.
    As for appraiser who are looking forward to being placed on a roster? You could have become a staff appraiser. And since the HVCC allows the lender to own Appraisal Management Companies, and that’s who you will be waiting for your assignment from, just wait until you don’t hit the number expected. You don’t think you will be passes over for an appraiser that will?
    The HVCC simply takes all of the independence from the appraiser and the brokers and gives the lenders all of the power. And for any person in this industry to think anything other than the truth can sit back and enjoy a career of being manipulated and controlled, and then watch their income get cut in half with nothing you can do about it.
    Sincerely
    Guy Eric McDonald
    Real Estate Appraiser

  14. Guy Eric McDonald

    HVCC: What Does it Mean to Appraisers?
    After reading this article, in Valuation, I am truly amazed. Amazed at how the appraisers in this article are either uneducated, uniformed, or just plain stupid. The comments by the appraisers and so call industry professional such as Bill Garber, I honestly say, need to ask are they even familiar with the HVCC? All of the comments illustrate the lack of intelligence by those who stand by smiling and acting as if anything positive will come of the HVCC.
    As an appraiser, I am fortunate to be somewhat diversified between, brokers, lenders and litigation. But this will impact all appraisers. For those that are saying “broker pressure” will be removed, I can only say be careful what you wish for because you just might get it. And in this case you got. You will now see your requests from brokers drop to zero. And if you attitude is “good then, no more broker pressure” you have already checked your ethics at the door and should not be in this field to start with. I have had several occasions when a broker wanted a higher value. I simply said no. And when they threatened to take their business to some other appraiser who would lie for them, then I’d wish them good luck. Oddly enough after a year or two, the same broker would come back around after their “other” appraiser was placed on one too many “black lists”. So again, if you can’t stand up to “broker pressure,” you shouldn’t be in the business.
    As for the HVCC, does anyone know how this came to be? Anyone? Bill Garber? The HVCC came about because Andrew Cuomo filled a lawsuit against WASHINGTON MUTUAL and E-APPRAISE IT because WASHINGTON MUTUAL was putting pressure on E-APPRAISE IT to either obtain value or higher appraisers that were able to meet the needed value. Now what stands out with this? Bill, any idea? WASHINGTON MUTUAL IS NOT A BROKER!!!!!! Andrew Cuomo then took aim at Fanny Mae for accepting such loans. Lets not forget Andrew Cuomo was once the director of HUD and knew all to well what was going on long before any of this came into the light. Now, not ONCE were the brokers listed in the original lawsuit. Not even in the second revision of the HVCC. What happened in the third revision of the HVCC? All of the blame was placed squarely on the brokers. Why did this happen? Why would Andrew Cuomo have such a change in heart for the lenders that were originally named in the lawsuit and blame a completely separate group of people? And with regard to the way the system is currently set up, even if an appraiser bowed down to an over pressuring broker, the lender does have this thing called an UNDERWRITER. Do I need to explain what an underwriter does? Anyone on board with the HVCC should have some sort of competency test or have their ethics re-evaluated as they have sold out. And to hear such comments from members of the Appraisal Institute should prove the Appraisal Institute should be discontinued as they are only around to echo whatever the corrupt lenders feel like shouting out to the masses.
    As for appraisers who are looking forward to being placed on a roster? You could have become a staff appraiser. And since the HVCC allows the lender to own Appraisal Management Companies, and that’s who you will be waiting for your assignment from, just wait until you don’t hit the number expected. You don’t think you will be passes over for an appraiser that will?
    The HVCC simply takes all of the independence from the appraiser and the brokers and gives the lenders all of the power. And for any person in this industry to think anything other than the truth, well, they can sit back and enjoy a career of being manipulated and controlled, and then watch their income get cut in half with nothing you can do about it.
    Sincerely
    Guy Eric McDonald
    Real Estate Appraiser

  15. Johnny

    April 1st I am calling for all HONEST hard working appraisers to not touch a key board unless they are getting a fair days pay without pressure for our work. Cumo should be forced out of office with a stupid stamp on his forehead.

  16. Steve

    Has anyone seen the recent closing statements on a loan transaction and how much the borrower, (end user) is being charged for the appraisal…seems like skimming to me…O i’m really missing the days of the old S&L scandals…

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