-----Original Message-----
From: Heidi G. Quigley [mailto:hquigley@kw.com]
Sent:
To: frontdesk108@kw.com; frontdesk161@kw.com
Subject: New appraisal Regulation??? Has anyone seen this yet?
From: Dave Biggers [mailto:info@alamode.com]
Sent: Monday, April 28, = 2008
To: nick@nickbosley.com
Subject: -- Spam = --URGENT: New regulation we need to stop
To: All agents and = REALTORS®
Re: New regulation we need to stop
From: David = Biggers, Chairman, a la mode, inc.
The last time I sent a memo to all the agents in the = country was when we were soliciting matching donations to our $250,000 pledge in = the wake of Hurricane Katrina. You responded wonderfully. Today's = reason for this memo, a regulatory call to action, is just as significant. In = the same way that a hurricane destroys a broad swath indiscriminately, there = are new regulations being handed down from
The new regulations came out of a lawsuit brought by = the New York Attorney General involving coercion of appraisers by large institutions. In the settlement agreement, the GSEs (Fannie Mae = and Freddie Mac), and the Office of Federal Housing Enterprise Oversight = (OFHEO) agreed to change national appraisal rules — in exchange for the = Attorney General's office terminating its investigation of the GSEs.
Unfortunately, while we believe the agreement has the = best of intentions, the hastily written embedded regulations (called the "Home = Valuation Code of Conduct", or HVCC) do not solve the problem and in fact severely = punish agents, mortgage brokers, appraisers, and ultimately consumers. If there ever was a case of the cure being = worse than the disease, this is it.
The two portions of the HVCC that most affect = you are:
"The lender will not accept any appraisal report = completed by an appraiser selected, retained, or compensated in any manner = by… mortgage brokers and real estate agents..." and
"…any person… who is compensated on a = commission basis upon the successful completion of a loan… shall be forbidden = from… any communications with an appraiser"
Why every agent should be concerned about the = proposed HVCC:
- Agents are specifically singled out as being "the problem", and = are banned from even talking to appraisers at all; that's a RESPA "death = sentence" for every relationship you've ever built
- It shifts power toward large institutions and away from agents, = since the lender alone becomes the sole point of contact for the borrower in = critical areas
- Your role as the prime coordinator of the transaction will be = severely damaged, and handed to the lender
- Buyers will wind up paying for a separate appraisal for every = potential lender, driving up closing costs, reducing competition, and ultimately = pushing housing affordability even lower — directly affecting your = homebuyers
- The business relationships that you've spent years building with = mortgage brokers are made worthless overnight, as borrowers will be forced to = lock in with one lender almost immediately
- The entire regulation is biased toward the large institutions and = against independent appraisers, mortgage brokers, and agents
- If this becomes law, what part of your value-added role will come = under attack next?
As you can see, this isn't just about = appraisers. The draconian measures in the HVCC absolutely exclude you from = properly assisting buyers and sellers during the appraisal, one of the most = important (and stressful) areas of the transaction. As the market = slows down and you're under fee pressure, is this the time to find that you've = had the core of what you do — guiding and counseling buyers and sellers = through your industry knowledge and business contacts — taken away from you in = the dark of the night?
I don't think so. That's why the whole = industry needs your help. And you can do it with just a few clicks and = perhaps a phone call or two.
It would be easy to think that this is an = appraisal issue, and appraisers can deal with it themselves. I = think I've shown above that it's very damaging to agents specifically, but I = believe also that there's a bigger issue here. Back when I first = personally donated $150,000 to the REALTOR® Relief Fund (click here for the news story), we had just entered = the agent software market, having spent 20 years serving appraisers. The = money that went to benefit agents and their families in the affected areas = ultimately came from appraisers, and those same appraisers stepped up to the plate again = in matching my additional $250,000 challenge.
You can return the favor to those appraisers — = and safeguard your own career — by simply visiting our website and using our = convenient form to send your comments to the powers-that-be. Agents outnumber = appraisers roughly 10-to-1, and your voice will have a huge impact on the OFHEO, = Fannie, Freddie, and Congress. All you have to do is visit our political = action page by clicking here: http://www.alamode.com/HVCC-RE. = (Remember: If left unchanged, it harms you too.)
I mentioned that we were comparative newcomers to the = sales side of the real estate business in 2005. But today, over 35,000 = agents use our websites and tools. And all told, over 100,000 agents, = appraisers, and mortgage brokers use our products. Unfortunately, all the = software in the world won't make this latest problem go away. But = 100,000 people collectively voicing their opposition to poor regulations — = now that can indeed make a difference. Join me in sending a message to =
Thanks for reading this, and thank you in advance for = your help.
Dave Biggers
Chairman
a la mode, inc.
Hercel Spears
RE/MAX Alliance Group
480-980-0778
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