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Spotlight on Fees, Fraud and Foreclosure

January 30th, 2012 by Bill Collins Leave a reply »

The New Consumer Financial Protection Bureau (CFPB) Begins to Scrutinize Appraisal Fees

The CFPB is starting to take a closer look at appraisal fees and, as part of its mandate, bring increased clarity to buyers, sellers and those refinancing to the breakdown of some costs which are not fully disclosed at their mortgage closings.

Writing in the Washington Post on January 27th, Kenneth Harney notes that the standard HUD-1 settlement statement includes just one line for appraisal costs with no definition of how much was actually paid to the appraiser and what amount was paid to an appraisal management company (AMC).  This may change as the CFPB is considering disclosures of the exact amounts paid to the appraiser and the AMC.

Mr. Harney notes that the AMC “may be wholly owned by or otherwise connected” to the lender.  The article quotes Frank Gregoire, a past chairman of the Florida Real Estate Appraisal Board, as saying that:

“The borrower receives no benefit from the [appraisal management] ‘service. The lender is able to outsource a significant responsibility—the selection of an appraiser—to an affiliated subsidiary, and profit from that task by making the consumer and the appraiser pay for the privilege. [This] business arrangement is concealed from the consumer/borrower, and the charge is misrepresented as an ‘appraisal fee’ on the HUD-1. This is dishonest, deceitful and unfair.”

The CFPB has a statutory deadline to put forth an improved HUD-1 by July so we are hopeful that full disclosure of how the appraisal fee is disbursed (along with the relationships between lenders and AMCs, actual services provided by AMCs, etc.) will result in improved working conditions (and pay) for appraisers.

A link to the Washington Post report (which includes a defense of AMCs and the present system by Donald E. Kelly, executive director of the Real Estate Valuation Advocacy Association) is found here: Consumer Financial Protection Bureau Scrutinizes Appraisals and Other Realty Fees

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McKissock 2012-2013 USPAP Online Course Now Available in Approx. 40 States and DC

McKissock Education, the official provider of the Appraisal Foundation’s online 2012-2013 USPAP courses, is now available in most states. Earlier this year, the Appraisal Foundation and McKissock announced their partnership and the online course is now available to most appraisers who are interested in completing this before the end of 2011. See if courses are available in your area and save up to 20% on course fees by going to our Online McKissock Portal.


Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

AppraisalPort Asks Appraisers the Question: Have You Noticed Any Recent Change in the Average Fee Paid by AMCs For Any Reason?

Appraisers interested in participating in this survey (and seeing the results of previous surveys) can do so by clicking on the following link: AppraisalPort

By the way, it will be interesting to check the ASC’s National Registry of Real Estate Appraisers during the next several days to see the number of appraisers who let their licenses expire last year. They reported yesterday (1/30/12) that 1,766 left the business.  Appraisers are not removed until one month after their licenses lapse so we will be getting the full reports shortly.  AppraiserNews.com will be reporting on this in our next newsletter but those of you who follow us on Twitter (Twitter.com/AppraiserNews and Twitter.com/AppraiserHelp) and LinkedIn will get the news as soon as it is reported.

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Pittsburgh Budgets $100,000 to Subsidize Appraisals in Property Tax Assessment Grievances and Appeals

Interesting report by Bob Bauder in the Pittsburgh Tribune-Review last Friday in which he announced that the mayor’s office would be paying half the cost for private home appraisals for city residences grieving their new assessments.  The article reported that Pittsburgh “will request proposals from state certified appraisers and negotiate a cost per property for the appraisals” and would then pay homeowners half the fee.  Mr. Bauder’s article reported that Pittsburgh gave similar assistance when Allegheny County last re-assessed properties in 2002. Pittsburgh to Subsidize Appraisals in Assessment Appeals

On January 27th, Bankrate.com’s Marcie Geffner noted that: “Declining house values create great opportunities for homeowners to contest their property tax bills and potentially save big money.” She gave an example of a Colorado property owner’s successful tax grievance and a link to her entire report is found here: Real: Fight Property Tax Bill with These Tips

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Another Reminder: The Season for Tax Appeal and Tax Grievance Appraisals is Now Beginning in Many Parts of the Country

So, what are you waiting for? How many times do we have to tell you to allocate some time each day to building your private appraisal practice preparing appraisals for tax grievance and appeal, estate, divorce, bankruptcy, buy/sell, trust formation, etc.?

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Breaking News: HUD Issues Report Just to Keep Name Out There

A link to this big story by The Onion is found here:
Department of Housing and Urban Development Issues Report Just to Keep Name Out There

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Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Obama Administration Proposes Changes to HAMP (Home Affordable Modification Program)

Apparently the Onion woke up HUD officials as evidenced by a January 27th press conference involving HUD Secretary Shaun Donovan, Assistant Treasury Secretary Tim Massad, and White House National Economic Council Director Gene Sperling.  The Friday afternoon press conference included the announcement by Administration officials that they would be attempting to expand eligibility in order to increase the number of homeowners receiving help.  HAMP was originally designed to reach up to four million struggling mortgage borrowers but most recent counts placed the number helped at less than one million.  In a report that day, CNNMoney’s Les Christie quoted Gene Sperling as saying that this was an “all of the above strategy to help responsible homeowners lower their costs and stay in their homes”.   Included in the revised HAMP program, which would begin in April, are incentives for principal reduction as part of mortgage modifications.  It is noted that these changes are unrelated to a new refinancing program that Mr. Obama announced in his state of the Union speech, details of which are to be announced in several weeks.  Links to the article by Mr. Christie and one by Bloomberg’s Lorraine Woellert are found here: Obama Administration Expands Foreclosure Prevention Program

Obama Expands Aid for Delinquent Homeowners

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Expanded Probe Into Mortgage Meltdown

Late in the afternoon on Friday, HUD Secretary Donovan again made headlines with the announcement that he and U.S. Attorney General Eric Holder made regarding a new, more powerful probe into the events (and those responsible) for the financial crisis.  CNNMoney’s Jennifer Liberto reported that day that this task force would be a coalition of those from previous groups along with more than 50 attorneys and investigators who would be assigned to it, according to Mr. Holder.  Mr. Holder also announced that subpoenas were being issued to 11 financial firms involved in the buying and selling of mortgages.  Ms. Liberto’s report noted the importance of efforts by New York State Attorney General Eric Schneiderman “who can take advantage of New York State laws that are tougher on Wall Street financial fraud than the federal government’s laws” according to Mr. Holder.

On Saturday, Firedoglake.com’s David Dayen reported on this “newly titled RMBS working group”.  He noted Mr. Schneiderman’s comments on MSNBC in which he indicated that the IRS could be brought in “…because there are huge tax fraud implications to some of the stuff that went on.”  Links to the CNNMoney report, Mr. Dayen’s report and the MSNBC video with Mr. Schneiderman are found here: Mortgage Probe Unveiled as Foreclosure Talks Loom

FireDogLake News Desk

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"Gretchen Morgenson on Corporate Clout in America"

The above is the title of Bill Moyer’s January 20th video interview with Pulitzer Prize-winning New York Times reporter and columnist Gretchen Morgenson.  This 18 minute interview in which Ms. Morgenson discusses how Fannie Mae taught Wall Street how to be the “quintessential crony capitalist” is well worth viewing.  Ms. Morgenson discusses how many small banks that did not create the problem are being penalized and that we are only learning to understand the full extent of what went on during the financial crisis.  On the one hand, Ms. Morgenson is optimistic because she feels that “Main Street gets it”; on the other hand, she makes the statement that: “It will happen again.”  A link to Mr. Moyer’s video is found here: Gretchen Morgenson on Corporate Clout in Washington – BillMoyers.com

Regarding the new mortgage fraud task force, Ms. Morgenson noted in Sunday’s New York Times:
“Perhaps the new working group will right this imbalance. But its members don’t have a lot of time, with the election coming. Private litigants have drawn a pretty clear road map for the places that this new group might go. Its leaders should welcome the assistance, given that the clock is ticking”.
A link to the Times’ article is found here: It Has a Fancy Name, but Will It Get Tough?

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Former AppraiserLoft Execs Now Used Car Salesmen?

Lily Leung, real estate and business reporter for the San Diego Union-Tribune, reported on January 12th that two former executives of the defunct appraisal management company AppraiserLoft had moved on to a new industry after leaving appraisers nationwide with millions of dollars in unpaid appraisal fees. Ms. Leung reported that barely three months after shutting down AppraiserLoft, two of their top executives (Aman Makkar and Scott Stokas) had resurfaced online with a new venture known as Clearlot. 

We at AppraiserNews.com have no comment on this except to say that we anticipate that our readership may have some thoughts about this.  Ms. Leung, by the way, told AppraiserNews.com that she continues to receive calls from appraisers asking for more information or assistance.

A link to Ms. Leung’s report is found here: CEO of Shuttered Appraisal Firm Now in Car Biz

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Rates & Dates

Mortgage interest rates generally rose from historically low levels in the most recent weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On January 26th, Freddie Mac reported that 30-year fixed-rate mortgages increased to 3.98% from 3.88% during the prior week and they noted that last year at this time, the rate was at 4.80%.

The MBA in its most recent Weekly Mortgage Applications Survey released January 25th for the week ending January 20th, reported that 30 year rates with conforming loan balances ($417,500 or less) increased to 4.11% from 4.06% during the previous week.   The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.39% from 4.40%.  At the same time, the average rates for FHA backed mortgages increased to 3.97% from 3.91%. 

In their press release of January 25th, the MBA also reported a decline of 5% in mortgage applications during this most recent survey.  Refinance applications declined to 81.3% from 82.2% in this most recent survey. 

Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

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Ask Angie

We want to congratulate our most recent winner: Arizona Certified General Real Estate Appraiser Ronald Keeler. Ron is an appraiser in Tuscon (Pima County) and has been appraising for 34 years. He was the first to answer correctly that Oscar Wilde said “The best way to appreciate your job is to imagine yourself without one” and that Dale Carnegie was the author of both “Act enthusiastic and you will be enthusiastic” along with “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.”

Today’s questions:

1. Who Said: "Be who you are and say what you feel, because those who mind don’t matter, and those who matter don’t mind."

a) Dr. Seuss
b) Ron Paul
c) Mark Twain
d) Joe Biden
e) None of the above

2. Who said: "Whenever you find yourself on the side of the majority, it is time to pause and reflect."

a) Barack Obama
b) Mark Twain
c) John Adams
d) John Boehner
e) None of the above

3. Who said: "I will not let anyone walk through my mind with their dirty feet."

a) The Dalai Lama
b) Chogyam Trungpa Rinpoche
c) Mahatma Gandhi
d) Nostradamus
e) None of the above

The first person to respond with the correct answers wins a choice of one of the following:

One Free Regular Listing on AppraiserHelp.com

A Free Copy of the Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

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Tell us what you think!

We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!

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We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at www.appraisernews.com

Regards,

Bill Collins, Appraiser Help Inc.

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