I hear that I have been labelled afanatic because I disagree with Fannie Mae’s new policies. I am being quoted
with single lines taken out of context, and without being asked any questions
or even being told they would quote me in their articles. It seems like a David
and Goliath situation. What I understand is that Fannie Mae is one of the
largest financial institutions in the world and if they go down, taxpayers pick
up the bill.
My opinion is very clear, I am pro-appraiser.In my opinion, there has been an orchestrated effort to devalue the appraisal
industry with one crisis after another, always leading the public to believe
appraisers are the root cause of all mortgage problems.
What about the “data” we hear so muchabout? Just imagine FNMA without the ability to take data from signed appraisal
reports. What would change? What if theyhad to pay appraisers for their data? Next, Fannie Mae and AMCs have worked together under the radar and now FNMA has granted a handful of AMCs the keys to the multi-billion dollar mortgage industry. Instead of a 5-10% fee these
companies charged prior to HVCC/Dodd-Frank, now they expect to receive just as
much and many times a larger fee than the appraiser. Pretty good work if you
can get it. And, who reviews appraisals? The AMCs? Lenders? Fannie Mae? Who
gets paid for that and who is truly qualified? AMCs get paid off the backs of
hard-working appraisers without having to disclose it to consumers. And the new
plan is for AMCs to create an army of appraisers working for their company who
work at their direction. Who is responsible for those appraisals when a
complaint is filed? I bet you know the answer…
Here are my complaints:
1. FNMA takes data from signedappraisal reports without consent or compensation. Realtors and the MLS charge
a fee for the data they collect. FNMA plainly tells us they plan on continuing
their efforts to take appraiser’s data to fuel their valuation models.
2. Appraisal Management Companies areallowed to avoid disclosing their fees. In no other industry is this allowed.
3. Six AMCs were given prioraccess to FNMAs new loan system giving them an unfair trade advantage over all
other competition. In my opinion, this is Bias and an Antitrust issue in any
other industry.
4. Third Party Data Collectors arebeing allowed to replace licensed appraisers. Granting unlicensed and minimally
trained people access to consumer’s property. This places consumers at great risk and is being promoted as a method toimprove appraisal quality. In my opinion, it is false advertising by stating
that third-party inspections improve appraisal quality. This appears aimed at
reducing the reliance of appraisers for consumers, providing FNMA with more
power to grow automated valuations and reduce the appraiser’s role in mortgage
lending.
5. FNMA can file a complaintagainst an appraiser without a signature and without giving the appraiser a
chance to defend themselves. Not allowed in any other business.
6. FNMA ads state:
A. “We are moving away from implying an appraisal is a defaultrequirement.”
B. “Empowering lenders to better serve their customers through aspectrum of options that foster a more efficient, understandable, and impartial
valuations system, saving time and money in the origination process.”
C. “Promotes safety/soundness by obtaining current observation of thesubject property.”
D. “The journey to a more efficient and fair home valuation process.”
This certainly sounds like an appraisalinspection is less reliable than a third-party inspection and appraisers must
not be able to observe the safety and soundness of a property better than a
third-party inspector. If this newprogram only impacts three to four percent of all total loans as FNMA claims,
then why the major announcements and advertising to let the public know? It
makes it sound like appraisers are on the way out. This is a major announcement
and they have made a very big deal by advertising that “We are moving away from
implying that an appraisal is a default requirement.” If this is for three to
four percent of all loans, I can only imagine what is in store for the future.
If Fannie Mae wants to work with theappraisal industry again, they could take these steps:
1. Remove the third-partyinspection program
2. Make AMC fee disclosuremandatory
3. Pay appraisers $3.00 for everyappraisal report they have used to take data from, past and future. This is very inexpensive compared to what appraisers have to pay for the data they use
from MLS.