Bill aims to suspend new appraisal rules

0
557

by J. Craig Anderson – The Arizona Republic

Valley loan brokers, home builders and real-estate agents said they’re hoping Congress will approve a proposed 18-month reprieve from new rules intended to stop appraisal-rigging on home purchases financed with conventional mortgage loans.

     

The bill, HR 3044, was submitted Thursday and has been referred to the Committee on Financial Services.

Some real-estate professionals in Arizona and elsewhere have been trying to mobilize their industry against the new rules, which took effect May 1.

Many mortgage brokers, appraisers and real-estate agents despise the code, which forces the blind selection of appraisers, often through a third party known as an appraisal management company.

A bill sponsored by U.S. House Rep. Travis Childers, D-Mo., includes a provision that would suspend enforcement of the Home Valuation Code of Conduct for 18 months.

Childers has said he was concerned that the code, which requires anonymous selection of home appraisers and limited contact between appraisers and other parties in the transaction, threatened to put some independent appraisers out of work.

Their three biggest complaints are that the appraisers often come from a neighboring community and don’t know the area well enough to make a valid assessment; that price competition is destroying careers of veteran appraisers who may charge more for their expertise; and that appraisals under the new system are coming in too low, killing some deals at a time when the economic recovery depends on them.

For instance, Phoenix mortgage broker Bob Wasieko said a pending custom-home sale in one of the Circle G Ranch subdivisions in Tempe was canceled when the appraisal came in $100,000 below the $600,000 the prospective buyer had agreed to pay.

Wasieko said the appraiser didn’t use any comparable custom-home sales as a basis for the appraisal and instead used "sales data from tract homes that backed up to major thoroughfares."

"And of course no interaction was permitted between the sales agent, lender or loan originator with the appraiser so that the ‘consumer’ was protected," he said.

Phoenix mortgage planner Jose Martinez, with the Optus Group, said the code is redundant because a shake-out after the downturn forced unscrupulous real-estate agents and brokers out of business.

"Two years ago, this might have helped," Martinez said.

Industry groups including the National Association of Realtors, mortgage brokers and home builders have been calling for government officials to amend or repeal the rules, which do not apply to federally insured loans such as by the Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture.

Industry trade group Appraisal Institute fired back last week at accusations by the real-estate agents and home builders that poor appraisals were killing home sales.

Appraisal Institute director Bill Garber suggested that the appraisals brokers and agents have criticized simply weren’t as high as they would have liked.

"We take offense with the notion that an appraisal is only good if it happens to come in at the sales price," Garber said.

ATTENTION READERS

We See The World From All Sides and Want YOU To Be Fully Informed
In fact, intentional disinformation is a disgraceful scourge in media today. So to assuage any possible errant incorrect information posted herein, we strongly encourage you to seek corroboration from other non-VT sources before forming an educated opinion.

About VT - Policies & Disclosures - Comment Policy
Due to the nature of uncensored content posted by VT's fully independent international writers, VT cannot guarantee absolute validity. All content is owned by the author exclusively. Expressed opinions are NOT necessarily the views of VT, other authors, affiliates, advertisers, sponsors, partners, or technicians. Some content may be satirical in nature. All images are the full responsibility of the article author and NOT VT.
Previous articleGI Forum receives grant to aid veterans
Next articleBiden on surprise trip to Iraq