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Support
NAMB's HVCC Lawsuit
After
more than a year of exhaustive negotiations with Fannie
Mae, Freddie Mac, Director of FHFA (GSE Regulator)
James Lockhart, and NY Attorney General Andrew Cuomo,
NAMB believes the time has come for your individual
voice to be heard.
In order for this "Call to Action" to
be effective, we ask that you fully participate,
encourage
others to join the action and continue calling
and emailing everyday, until advised to stop by NAMB.
This
will NOT be a one day action!
We have received hundreds of e-mails through the hvcc@namb.org e-mail address outlining specific cases where the HVCC
has created delays and additional costs to consumers.
NAMB has categorized and compiled a report of the examples
received, which was sent to FHFA Director James Lockhart.
Please use your own examples in your conversations
with legislators, regulators, or their staff. Also,
please visit the NAMB
HVCC Resource Center for additional
information and documents on the HVCC.
Who will you be contacting?
Below are talking points and background information
to assist in your conversations. Please remember we
are all professionals and should conduct ourselves
accordingly in any communication with the above parties.
For the most successful and influential calls, it is
important to concisely quantify how the HVCC is affecting
your consumer and your business.
Talking Points:
- NAMB conservatively estimates (breakdown below)
that the HVCC is costing consumers over 2.8
BILLION dollars a year in extra fees, created by
long
delays (extended lock-in fees) and higher
appraisal costs.
- Unregulated Appraisal Management Companies
(AMCs),
who have been the subject of several misconduct
investigations, are the centerpiece of
the HVCC. The original Cuomo
investigation involved a federally chartered
bank and an AMC.
- AMCs are driving honest appraisers
and mortgage brokers from business, eliminating
competition, increasing
costs to consumers and reducing state revenue.
The HVCC is causing significant delays
in real estate transactions,
hurting real estate agents, title companies
and other third parties reliant on turnaround time.
- HVCC does nothing to reduce fraud, as it legitimizes
the same failed model, which was the subject
of Attorney General Cuomo's investigation.
- No Portability! Consumers are "trapped" with
a specific lender. If a better deal becomes available
with a different lender, the consumer is forced
to pay for another appraisal.
Background:
I. Lack of Portability
- Lenders are not allowing borrowers to transfer
appraisals, regardless of the reason.
- Forces
the borrower to pay for another appraisal and
wait for a new appraiser to be assigned and complete
it,
increasing the total cost
and time needed for
obtaining a home. Delays in turnaround times also cause the borrower
to miss rate lock deadlines and possibly face penalties charged by
the lender.
- In a poll conducted by NAMB, 75.8% of respondents
said that 0% of their appraisals are portable since
the
enactment of the HVCC.
II. Lack of Quality
- A. AMCs are assigning appraisers from a different
municipality, county, or even state to appraise the
target house, therefore unfamiliar with the neighborhood
and unable to produce an accurate appraisal.
i. Because of this, the HVCC is forcing appraisers to be in direct
violation of the Uniform Standards of Professional Appraisal Practice
(USPAP) for jurisdictional
competence.
- Because AMCs pay appraisers such low fees, those
assigned appraisers willing to do the work are often
inexperienced and fail
to adequately
appraise the
home.
III. Increased Cost of Appraisals
- The minimum increase
we have seen in direct consumer cost is $150
per appraisal. That, coupled with the drastically
increased appraisal turnaround times that
impose extended lock periods at an average expense of $561.95 per loan,
is now costing consumers an estimated additional
$711.95 per transaction.
- $150.00 - minimum increase
per appraisal
$561.95 - average loan amount of $224,778 at
.25% for extended lock period
$711.95 - average total increase per transaction
x 3,870,552* - 2007 HMDA report of residential
real estate loans originated
$2,755,639,496 - $2.8BILLION in increased fees
to consumers!
IV. Articles Illustrating the Effects of the HVCC
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