This week, NAR submitted comments to the Consumer Financial Protection Bureau’s (CFPB) proposed rule amending Truth in Lending (Regulation Z) per Dodd-Frank. Much of this proposed rule looks familiar to you because CFPB is really just republishing regulations and proposed rules initially released by the Federal Reserve. In fact, the proposed rule states specifically that it does not “impose any new substantive obligations on persons subject to the existing Regulation Z, previously published by the Board.”
NAR’s comments were similar to those provided to the Federal Reserve in 2010. In the letter to CFPB, reiterated support to greater disclosure of appraisal fees, use of an expanded definition of value to include broker price opinions, and a definition for appraisal management companies (AMC) that goes beyond the number of appraisers on the AMC panel.
The National Associaiton of REALTORS® (NAR) continues its holistic approach to valuing real property with the adoption of its Responsible Valuation Policy. The document is the culmination of NAR’s efforts to consider all methods of valuing real property. NAR previously hosted two valuation summits and two working groups were convened. Members from across NAR’s policy structure had input in the document and included representation from the Professional Standards, Real Property Valuation/Appraisal, Federal Housing Policy, Conventional Finance and Lending, Commercial, and Business Issues Committees. Input was also provided by RPR.
The document will serve as the foundation for NAR’s policy position on the various methods of valuing and pricing real property – including appraisals, broker price opinions (BPO), and automated valuation models (AVM). The policy document also includes language from NAR’s Code of Ethics as a reminder to members that REALTORS® hold themselves to the highest professional standards in the industry.
Last week the Obama Administration unveiled its plan to help homeowners refinance to take advantage of historically-low interest rates. We are going to focus on the valuation side of the plan. If you want the rest of the details you can go here and here.
The program includes refinance options for GSE (government sponsored enterprises, Fannie Mae and Freddie Mac) and Federal Housing Administration (FHA) borrowers. Both programs forgo the appraisal requirements in the refinance process. According to the White House Fact Sheet, “the GSEs would be directed to use mark-to-market accounting or other alternatives to manual appraisals for any loans for which the loan-to-value cannot be determined with the GSE’s Automated Valuation Model. This will eliminate a significant barrier that will reduce cost and time for borrowers and lenders alike.”
In line with the administration’s announcement last week, the US Department of Agriculture’s (USDA) Rural Development rolled out its refinance pilot for borrowers already using the Rural Development 502 program. It allows borrowers in the hardest hit rural areas who are underwater to refinance and take advantage of today’s rates. The lender does not have to submit new credit reports, appraisals, minimum property determinations or property inspections. The pilot is available in 19 states.