Revised Oversight of Appraisal Guidelines?

I don’t know if I should laugh or cry over the latest attempts to shore up the mortgage lending industry. First the congress and senate in their in finite wisdom decide to give hundreds of billions of tax payer money to the very institutions who lost it to begin with. Next they gave MORE power to the very criminals who “lost” the investor money to begin with.

One SMALL element of fraud has been in the appraisal side of the transaction. It is true that there have been plenty of  occurrences where an appraiser simply fabricated the “numbers” to make a deal happen but the situation is not that simple. During the wall street/media driven, hyped up home pricing, most appraisers just followed the inflation trendings. Adding to the situation was the reality that there were too many untrained people in every aspect of the industry.  What will really fix this situation will be increase education and communication between the real estate sales and lending industries.

Here is the  press release that the media will spread to give the impression that everything is in control…..

Excerpt from NAR:  Home Valuation Code of Conduct (Revised Version)

A revised version of the Home Valuation Code of Conduct, an agreement between New York Attorney General Andrew Cuomo and Fannie Mae and Freddie Mac, has been released. The Agreement will be effective May 1, 2009.

Here is a link to the revised Home Valuation Code of Conduct:

And here is Cuomo’s statement on the Agreement:

“This revised agreement with Fannie Mae and Freddie Mac is a step forward: it preserves the core goals of ensuring appraiser independence and eliminating systemic conflicts of interest. It also incorporates common-sense suggestions of industry participants that increase flexibility and efficiency. Under this agreement, Fannie and Freddie commit to purchasing only those loans that are supported by appraisals conducted independently and honestly. Erecting and enforcing meaningful firewalls between appraisers and lenders, and forcing Fannie and Freddie to stop working with unscrupulous lenders and brokers, are key steps in cleaning up the mortgage industry and avoiding another crisis like this in the future. My office looks forward to working with the new Administration in making more reforms to the system in the New Year.”

The platitudes sure sound nice and the Cuomo’s statement even implies that things will be different and better then the “other” administration. All this grandstanding would ring a bit truer if the people in charge of Freddie Mac, Fannie Mae and the government oversight were any different than the people who created and benefited from the real corruption that caused the situation we are NOW facing!  The real criminals need to be held responsible for the mess we’re in …. right up to Democrat Senator Dodds who helped create and oversaw  Freddie Mac and Fannie Mae. Did you know that Democrat Senator Dodds was the single largest recipient of campaign funds  paid by Freddie Mac and Fannie Mae during the 2008 elections and Obama was second?

Here is the bottom line of the new code of conduct as written…..

IX. Scope of Code

Nothing in this Code of Conduct shall be construed to establish new requirements or obligations that: (1) require a lender to obtain a property valuation, or to use any particular method for property valuation (such as an appraisal or automated valuation model) in connection with any mortgage loan or mortgage financing transaction; (2) affect the acceptable scope of work for an appraiser in connection with a particular assignment; or (3) require the lender or any third party acting on behalf of the lender to take any action prohibited by federal or state law or regulation.

The question of the day is this: Are you getting the “Change” you voted for?  Cha Ching!

Jeff Daniels is a full time Licensed Realtor working in the Tampa bay area for over 18 years. To see the many incredible real estate opportunities click:  www.TampaFloridaHomeFinder.com  or call Jeff Daniels at Keller Williams Realty at 813-684-9500 ext 237 for everything you need to make Florida Home.