Senator Barbara Mikulski Contact's Coester Appraisal

US Senator Barbara Mikulski responds to Coester Appraisal Groups letter regarding the national real estate market and the role of the appraisal industry.

Please see letter below:

"Dear Mr. Coester:

Thank you for contacting me about recent housing legislation and programs. It's great to hear from you.

I appreciate hearing your ideas and views about this issue. The foreclosure crisis is at the heart of the economic downturn. Without the right policies, the effects of foreclosure can be devastating not just to the homeowner, but to their communities and the entire nation. This problem requires creative solutions and targeted initiatives that address the housing sector directly and help families keep their homes.

I have always been on the side of smart and strong regulations. Our financial system went off a cliff and we need common sense reform to restore confidence in our economy. Over the past 10 years, there were too many scams and schemes. Now we need to protect consumers to make sure it never happens again. Mortgages should be transparent and easy to understand, and consumers should get the most affordable interest rate. I also know that we can't impose requirements on lenders and appraisers that prevent them from doing their business. I want to protect the good guys in the housing industry.

I have always fought for consumers and against unfair and abusive practices in the marketplace. I will only support housing legislation that puts consumers first. Knowing of your views is helpful to me and I will keep your views in mind as the Senate continues to consider housing legislation.
 
Again, thank you for contacting me. Please let me know if I can be of help to you in the future.

Sincerely,
Barbara A. Mikulski
United States Senator


Please do not respond directly to this e-mail. The originating e-mail account is not monitored.
If you would like to get in touch with me again, please visit my Webform at http://mikulski.senate.gov/Contact/contact.cfm"

FHFA Reinforces HVCC

On July 22, 2009 FHFA released a notice reinforcing the role of the HVCC in restoring the real estate market as a whole. In a short but very straight forward letter the agency addressed some very key points about the negative press the HVCC is receiving by the industry. The agency emphasized that the HVCC is not the cause of all the bad press about it but is rather a process that is helping restore the real estate industry as a whole. It addresses key points in respected to the use of AMC's, Increased Cost of closing and turnaround times.

In conclusion they emphasized the "critical role" of the HVCC and how important accurate appraisals and quality appraisers are to the underwriting process. To view the full letter click here

The TRUTH about the HVCC (From a Broker)

Since HVCC reared its ugly head, I have one less job to do as a mortgage person. I don't need to CANNOT order appraisals.

You see, I am forbidden from talking to appraisers (obviously my amazing ability to brainwash appraisers coupled with my ruthless quest for a commission render me completely inappropriate for this job).

Realtors, congratulations. I guess now YOU have the job of talking to the appraiser.

And since you didn't hire the guy (the bank did) you can't fire him if he doesn't give you the right value.

But you can still "INFLUENCE". Kind of like I used to do?

And you ARE an interested party...are you not? Just like me? We are both earning commissions if the appraiser will just give us the right #&*$% freaking value!

I keep wondering this: Why can Realtors (who also have a vested interest in the transaction) talk to appraisers, but mortgage people can't?

Wait. Should I even CARE?



Want to know a secret? I'm glad the appraisal monkey is off my back.

I used to get stuck paying for appraisals when deals fell though.
I used to get yelled at by Realtors and clients when "my" appraiser came in with a value too low.
I used to be the one who had to send all the paperwork to order the appraisal.
I used to ALWAYS take the time to discuss comps, values, and to answer any questions from the appraiser.
I used to be in the middle of problems getting the appraiser into the house.
I used to need to print the appraisals out on the color copier to hand them in to my processor.
I used to try to calm down agents and clients who were nervous about VALUE before the appraisal was done

I used to get e-mail after e-mail from the Realtors about when the appraisal would be done...needlessly reminding me of the appraisal contingency date.
Not to mention the bank, who would call me directly to discuss the appraisal (when doing their review)
And I never thought twice about how much time this took away from my day, because for so long it was just PART OF THE JOB.

Don't get me wrong. I am against HVCC because it is BAD for borrowers.

But is it BAD for me? Anything that is bad for our industry and our clients is bad for me.

But has HVCC saved me time, energy and frustration?

Yep.

An unintended (and rather sweet) consequence.



Written by Janet Guilbault, Mortgage Banker/Broker Based Out of the San Francisco Bay Area

Wholesale Lending is down and brokers consildate

The HVCC is causing some major shifts in the entire industry. One of the smaller things that is happening is slowly mortgage brokers are disappearing. As the months go by and they realize the HVCC is not going to go away they either have the option of putting up with being a pawn in the lenders business model or become a lender themselves. Currently you are seeing a combination of the two. Essentially you are seeing loan offficers move from mortgage brokers to lenders or banks, and you are seeing the broker owners consolidate there offices to one large office or open a branch office for a bank, lender or net branch like Allied, WestStar or Eagle.

Regardless you are going to see major changes in the mortgage industry and the way originators do business. The reason is because as a broker they just simply cant compete and be successful. Industry statics show the defalt ratio on a brokered loan is 50% higher than on a retail organited loan. The reason is simple, with no skin in the game its much easier to make the loan work.

Lenders have recongized this and they are taking steps to ensure they are protected. The HVCC is just one of many changes that are going to take place over the next few months and coming years that will limite the lenders exposure and increase the brokers. This is coming late as the mortgage industry is in shambles and banks are losing there shirts.

Would the real AMC's please stand up?

With the HVCC in full swing you are seeing a huge backlash from mainstream media, appraisers, realtors and mortgage industry on the negative impact the HVCC is having on the mortgage industry and US real estate as a whole. Obviously all of the alegations are not justified however some of them are and some are a legitimate concern for the lending world.

Bottomline is that most AMC are dropping the ball, and need to step up and preform.

Most National Appraisal Companies are not providing anywhere near the service that is expected by clients and that is reasonable for the industry. There are several large national AMC's that sprung up as off springs of other companies to capitalize on the HVCC. Through there high level connections and brand name they were able to capture some major clients and it has been an absolute disaster. This is first hand knowledge from the mortgage companies themselves and they are currently looking for my company to step in and take over operations.

Basically these companies hired inexperinced staff to try and handle the increased volume. This has not only caused confusion but extremely long delays. An appraisal is no easy task to complete and often needing an expert opinion to assist in the completion or addendum's which simply put most companies aren't equipped to do. This is something that is totally unacceptable and should be considered a discrace to the industry.

An AMC should be the lenders lifeline and should be the person they want to call to get there orders done the right way. Currently the industry is treating them as the exact opposite instead of a trusted advisor there more of person they regret having to call because its like calling to get tech support from AOL (alot of holding and no resolution.

The reality is that management copmanies need to be run by appraisers and mortgage professionals seasoned in the industry. Not by people who are just starting another business or are just trying to cash in on the HVCC.

The reason is simple there's no way anyone can have an idea of what's at stake and what needs to be done to get the appraisal is and approved without having first hand knowledge of the process.

From my personal experience, investing in experinced professional staff to deal directly with the appraisers and clients has been the best investment i have ever made. Someone with first hand experince on the front end can talk to someone differently then a someone who is just working in a call center. This business is not a call center business or an automated business and it never will be.

At the end of the day someone is still going to have to inspect the property, write up the report, select comparables, revise the report and finish it. Due to all the steps involved you are constantly going to need someone on the back end pushing the orders through. This is where an experinced staff is going to pay divendeds. They are organized, professional, understanding, demanding and simply more effective. Now i am all for automation however there is a difference between leveraging technology to have talented, experienced employees be more effect and using technology to try and make an unexperienced, lazy person effective. The second is exactly what most companies are attempting and falling to do.


As a mortgage lender you have every right to hold your appraisal company to a high standard.

So what should you expect?

1. You should expect the borrower to be contacted within 48 hours of the order being place.

2. You should expect a same day response from the management company and follow-up calls until you get what you need done.

3. The appraisal turnaround from initial order to receipt of final report to be in the 5 -10 day range. Anything significantly more should be questioned.

4. You should expect a goto person that you can be in constant contact with and that knows what's going on with your files. (Having notes in the file is not enough as there is no action being taken with the looking up the file)

5. You should expect your appraisals reviewed and checked for quality. A good AMC will ensure the value is not to low but also not to high. There aim should be market value and they should communicate that to you on the front end and explain how they do business.

If an AMC can provide that above for you. You are in good hands and stick with them.

TAVMA Pushes Back on NAMB HVCC Claims

PITTSBURGH (June 30, 2009) – The Title/Appraisal Vendor Management Association (TAVMA) has sent a 3-page letter to the National Association of Mortgage Brokers (NAMB) to protest that organization’s “inaccuracies and mischaracterizations of appraisal management companies (AMCs)” in what TAVMA calls an effort to undermine the HVCC.

“Everyone in the industry knows there were serious problems with the collateral valuation part of the business,” said Jeff Schurman, TAVMA executive director. “Maintaining an arms-length relationship between the loan originator and appraiser is the centerpiece of the HVCC. To characterize AMCs as the centerpiece of the Code is simply false.”

While Schurman admits that the HVCC is not perfect in that it upends long-standing appraiser/client relationships, he said that attacks levied against AMCs are baseless. These organizations ensure an arms-length transaction between loan officers and appraisers. They are the best way to assure an arms-length relationship between appraisers and their clients.

“AMCs are not the problem and there is no tangible data to suggest that they are,” Schurman wrote in the letter. “The NYAG, Fannie Mae, and Freddie Mac determined that loan originators, including mortgage brokers, whose compensation depends upon the loan closing, were exerting improper influence on appraisers’ work. Moreover, appraisers themselves vehemently accused loan originators and mortgage brokers of exerting improper influence.”

In its letter, TAVMA calls the NAMB’s efforts a “smear campaign” and asked NAMB to take its grievances with the Code to its authors, the GSEs and the Attorney General of New York. A number of politicians were copied on the letter, including Barney Frank, Paul Kanjorski, Christopher Dodd and New York Attorney General Andrew Cuomo.

About TAVMA
Headquartered in Pittsburgh, The Title/Appraisal Vendor Management Association (TAVMA), is a non-profit professional organization that represents more than 50 companies engaged in the real estate settlement services industry. TAVMA promotes the vendor management industry and presents its members’ positions to government and media, protects its members’ rights to do business without unfair and anticompetitive legislation and regulations and provides useful information about issues impacting the real estate settlement services industry. For more information about the organization, visit the website at www.tavma.org.



Editor’s Note: For a copy of the original letter, contact Jeff Schurman at 412-849-1261, or go to http://www.tavma.org/index.php?option=com_content&task=view&id=184&Itemid=30