1. Is it permissible to co-list a home with agents and/or brokers from two different firms?

2. Is their a way to search MLS (of LI) to find which agents or brokers have sold the most homes in a given town during a specific timeframe?

TIA,

Ken

Trouble Viewing? Click here.
Click here to Forward to a Friend.

June 9, 2009

HVCC CALL TO ACTION

To:      All Mortgage Brokers, Real Estate Agents, Appraisers, Lenders, Home Builders, Title Agents, and Consumers
From:  Marc Savitt, President- National Association of Mortgage Brokers

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?

NY Attorney General Andrew Cuomo's Office: (212) 416-8000, Internet Complaint
Federal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
Fannie Mae: (202) 752-7000, headquarters@fanniemae.com
Freddie Mac: (703) 903-2000, Internet Complaint
Senators, Representatives and Governors: Click here for contact information.
Also, please contact your local TV and Newspaper outlets.

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:

1)         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.

2)         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.

3)         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.

4)         HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo's investigation.

5)         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
    A.  Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.
    B.   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.
    C.   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.
    B.   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
    A.  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.
    B.   $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
    A.  The Appraisal Bubble - The Center for Public Integrity
    B.   The Cure is Worse than the Disease - Appraisal Press
    C.   Appraisals Roil Real Estate Deals - The Wall Street Journal
        i.     Feel free to forward these articles and/or reference

One or a few matched pairs is hardly conclusive proof of a market trend.  

Matched pairs are flawed as at technique and essentially meaningless because they can achieve ANY result you want them to by simply searching for a pair that supports your desired conclusion.

It is always a treat in litigation consultation/support to get an appraiser on the other side using paired sales to prove an idiotic (inflated or deflated) adjustment and then "pair"  his or her other sales for the same component or other components.

Years ago, when I did my narratives to earn my former SRA and IFA designations, I used homes in nearby Levittown (NY) for my subject properties. I had to go thru MANY MANY dozens of sales in each case to come up with two that could "prove" any given adjustment. This was in a vast sea of originally identical homes, probably as ideal a comp pool as could be desired.

While paired sales can be misused/manipulated, my primary objection to them is that they simply represent two random indications from a highly imperfect market that more often than not are meaningless.  

I did not make up my demo report analogy.   In both instances, in an extremely homogonous market, I had to test in excess of 50 nearly identical (in all but one or two significant differences) pairs to find one that supposedly "proved" any adjustment result that wasn't absurd...  

Unfortunately, paired  sale analysis assumes a much more efficient marketplace than that which exists in the real world, and therein lies the fundamental flaw in this method.   Stated differently it assumes that all market participants view all components (to value) equally with similar expectations and motivations that also rarely exist.  People buy what they buy for many different reasons (motivations).  Many times they buy in spite of a feature that has no particular value or use to them. Almost All home purchases involve some degree of settling for a multitude of factors that often can't be quantified.  

I wish the industry would divorce itself from paired sales analysis. It is an outdated and flawed method that has no statistical validity and bears no cognizant relationship with the market.

my 2 cts...

Flyer Web Page   |   Print Version

One Story Completely Updated Energy Efficient Expanded Ranch 2953 Kinloch Road Wantagh, NY 11793 MLS: 2157326 List Price: $429,900 OPEN HOUSE Sunday 8/23/09 1 PM to 4 PM
DESCRIPTION Updated Kitchen W/Cherry Finish Maple Cabinets, Stainless Steel Appliances, Brushed Satin Nickel Accents, Glass Tile Backsplash,Paradiso Granite Counters/Foyer/Hall Floors, Bi-Level Halogen Under Kitchen Cabinet Lighting, Walk-In Closet, Updated Oversized Main Bath, New Fixtures In 2nd Bath, Architectural Grade Roof, Greenhouse Window, Argon Gas Filled, Low E Coated Triple Pane Windows W/Lifetime Warranty. Forest City South Section - Just S/O Ss Pkwy, Just E/O Oakfield Ave Off Barrie Ave Walk To Forest City Park/Pool PROPERTY FEATURES Updated Cherry/Granite/Stainless Kitchen Updated Oversized Granite/Tile Bathroom King Bedroom Suite with Walk-in Closet & Dressing Room Woodburning Fireplace Easy Maintenance HDPE Composite Deck Roll-Up Motorized Electric Awning Over HDPE Composite Deck Full Finished Basement with Humidex De-humidification System  Architectural Grade Roof With Cobra Vent & Attic Fan Low E Coated, Argon Gas Filled Triple Pane Windows with lifetime warranty  Paradiso Granite Foyer, Kitchen and Hall Floors Recent Burnham Cast Iron Boiler W/Riello Burner Recent 150 amp Electric Service with new stainless steel mast Lush Parklike Grounds loaded With many Specimen Plantings Main Floor Laundry Room CONTACT INFORMATION   Kenneth M. Rossman, Realtor Kenneth Rossman 2953 Kinloch Road Wantagh, NY 11793 800-491-6380 Email Me Virtual Walk Thru with floor plan

A quality orientated commercial and industrial real estate appraisal firm based in Wantagh, Nassau County, Long Island, New York; experienced in appraising commercial / industrial properties and land throughout Nassau, Queens, Kings and Suffolk Counties.

Where Your Complete Satisfaction is the Real Value

Appraising Real Estate on Long Island for Over Thirty Five Years

Accurate, Reliable, Clearly Written Real Estate Appraisal Reports By a Highly Seasoned NY State Certified General (NY # 463195) Real Estate Appraiser.

Fast Turnaround - 10 to 15 (working) day average on non-complex commercial or industrial real estate appraisals

Many Types Of Commercial and Industrial Real Estate Appraised - mixed use buildings; freestanding, strip or row retail office or industrial buildings, commercial and industrial condominiums, residential compounds; apartment buildings; shopping centers, retail stores, gas stations, funeral homes, nursing homes, medical office buildings, restaurants, catering facilities, nurseries/garden centers, greenhouse operations, day camps, office buildings, marinas, lumber yards, factories, manufacturing facilities, warehouses, refrigerated warehouses; schools; municipal buildings; churches; vacant land & subdivision; leasehold; leased fee; partial interests; life estate.

Appraisals For Any Purpose - to estimate fair market value or fair market rental value for sellers, buyers, landlords or tenants.; estate tax or settlement; Bankruptcy; Immigration (I-864 Support); gift tax; financial planning; matrimonial; pre-foreclosure/portfolio review; mortgage (first mortgage, second mortgage, refinance; condemnation; Tax Grievance/Tax Appeal/certiorari; family buyout; partnership dissolution or buyout; corporate planning; guardianship, conservatorship; highest and best use analysis, retrospective appraisals, life estates, partial/minority interests, etc.

Reasonable Real Estate Appraisal Fees - since I am completely computerized I have no need for support staff - this allows me to pass along substantial savings to you. For non lender and/or non mortgage loan origination appraisals I offer a short form type report which represents a significant cost savings over traditional narrative reports, while essentially providing the same research, analysis and valuation methodology - presented in a logical, easy to understand format.

Several Real Estate Appraisal Report Formats are offered for every type of real estate so that you don't have to pay for more of an appraisal report than you really need. See our "Reports" page for a complete description of the different types of real estate appraisal report formats that are available.

Fee Schedule (Commercial/Industrial)

http://www.eappraiser.ws/index.html

Please Call Us Now Toll Free at 800-491-6380 To Order An Appraisal

Cities/Towns/zip Codes Serviced in Nassau Suffolk and Queens Counties:

A Retrospective Real Estate Appraisal is used to estimate the market value of real estate/real property as of a point in time in the past.

For Example: The real estate appraiser was tasked with providing the market value of real property 10 years earlier, which was the date of a [death, gift, marriage, divorce, acquisition, taking (eminent domain), tax assessment, etc.]. The real estate appraiser provided a retrospective appraisal, limited to using knowledge available in the subject market then current at that point in time.

S&P/Case-Shiller Home Price Indices:

http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_062418.pdf

We have extensive in office comparable sales data back to the early 1970's for Nassau, Suffolk, Queens  Counties and some retrospective data for Kings County, NY

Reasonable fees, commensuarate with the complexity and time required:

Single family residence (comprehensive form report) 1990 to current date from $325.00*

Single family residence (comprehensive form report) 1973 to 1991 from $375.00*

Single family residence (comprehensive form report) before 1973 - call for quote (fee varies by)

*larger homes, complex properties and difficult access would cost more.  

Multi-family properties add $150 for 2-family and then $50 per additional residential unit.   

Mixed use multi-family properties add $250 for 2-units and then $100 per additional commercial unit and/or $50 per additional residential unit.

Non-complex commercial and or industrial appraisals from $875.00.  

Fast Turnaround.

Accurate Appraisal by Seasoned Appraisers.

Call Ken Rossman for additional information.

Ken Rossman
NY Certified General Appraiser #463195

Serving Long Island for over 36 years
2953 Kinloch Road
Wantagh, New York   11793
Phone: 800-491-6380

Local Phone: 516-826-8703
Fax:  800-517-1296
kenr@optonline.net
www.eappraiser.ws

Manipulation of the appraisal process by mortgage brokers, commissioned loan officers and real estate brokers/agents has been the dirty little secret of our industry for over 20 years and has become increasingly more rampant over the last 5-7 years.

IMHO, the HVCC, regardless what final shape it takes and whether or not it is even implemented, has done more to bring the issue of appraiser independence out of the shadows and into the limelight than anything else I am aware of in my 35 years in the industry.

Attention to the appraiser independence issue is at a fever pitch by industry regulators and legislators.  Public awareness of the issue is even greatly enhanced due to increased media attention.

I am optimistic about the future for ethical appraisers, there will likely be many changes unfolding over the next few years.  Hopefully at minimum the following changes are on the way:

#1 A real firewall between mortgage brokers, commissioned loan officers, real estate agents/brokers and real estate appraisers. 

#2 Real enforcement with real teeth/consequences for whatever laws, etc. that  are implemented.

The next big issue will be either eliminating the AMC's and/or reining in their predatory tactics to allow appraisers to earn a fair fee which in turn will allow us to perform the necessary due diligence/verifications, etc. which in turn will result in more accurate valuations.

A bill to diminish predatory lending by enhancing appraisal quality and standards, to improve appraisal oversight, to ensure mortgage appraiser independence, to provide for enhanced remedies and enforcement, and for other purposes.

The proposed Fair Value and Independent Appraisal Act , introduced by Sen. Robert Casey [D-Pa] amends the Truth in Lending Act to prohibit a creditor from extending a mortgage to any consumer without first obtaining a written appraisal of the property to be mortgaged, prepared in accordance with specified requirements. Requires a creditor to provide a copy of each such appraisal to the consumer without charge, at least three days prior to the transaction closing date. Declares unfair or deceptive specified property appraisal practices in the provision of:

(1) mortgage lending services for a consumer credit transaction secured by the consumer & principal dwelling; or

(2) any mortgage brokerage services for such a transaction. Establishes civil monetary penalties for such practices. Directs the Board of Governors of the Federal Reserve System and the Federal Trade Commission to jointly prescribe regulations defining such unfair or deceptive acts or practices.

http://thomas.loc.gov/cgi-bin/query/z?c110:S.2860:

The fact that bills like this are even being suggested appears to be a baby step in the right direction.

If you agree, go to this site and vote for the bill. It is certainly worth getting more voices behind it.

http://www.washingtonwatch.com/bills/show/110_SN_2860.html

After reading the bill, it is straightforward and seems to do what we all want.

The letter urges Withdrawal of GSE Co-op Agreements...

The letter, dated 6-19-08 (well after the 4-30-08 close of the "comment" period), cites requirements that would undermine the safety and soundness of the mortgage credit system, reduce the availability of mortgage credit, and lead to less reliable and accurate real estate appraisals, the FED, OCC, OTS, and NCUA, in a joint letter to OFHEO, urged Fannie the GSE's and New York Attorney General to withdraw the Cooperation Agreements and Home Valuation Code of Conduct (HVCC) that were announced in March of 2008.

Here is the letter:

http://www.eappraiser.ws/regulators_jointletter_hvcc.pdf

It states: "Moreover, issues regarding appraiser independence and protection from coercion are already adequately addressed by current and pending rules and guidance of the Agencies."

It will be very interesting to see if/how this alters the landscape...

OFHEO ANNOUNCES FIRST QUARTER 2008

MINIMUM AND RISK-BASED CAPITAL CLASSIFICATION

FOR FANNIE MAE and FREDDIE MAC

WASHINGTON, DC - James B. Lockhart, Director of the Office of Federal Housing Enterprise Oversight (OFHEO), the safety and soundness regulator for Fannie Mae and Freddie Mac, classified Fannie Mae and Freddie Mac as adequately capitalized as of March 31, 2008. Both Fannie Mae and Freddie Mac have publicly released financial results for the first quarter 2008 and OFHEO's results are consistent with those publicly released data.

On March 19, 2008, OFHEO announced an agreement with the Enterprises to reduce the OFHEO-directed capital requirement from 30 percent to 20 percent in recognition of the significant remediation efforts and the commitments by the Enterprises to raise significant new capital and to retain substantial surpluses over the OFHEO-directed requirement.

On March 31, 2008 Fannie Mae's surplus over the OFHEO-directed requirement (20 percent over the statutory requirement as of quarter-end) and statutory capital requirement were 13.5 percent and 36.2 percent, respectively. This compares to 9.3 percent above the 30 percent OFHEO-directed requirement and 42.1 percent above the statutory capital requirement at year-end.

Freddie Mac's surplus above the new 20 percent OFHEO-directed requirement was 18.5 percent while its surplus over the statutory requirement was 42.3 percent for March 31, 2008. This compares to 10.0 percent above the 30 percent OFHEO-directed requirement and 43.0 percent above the statutory requirement at year­end 2007. Both Enterprises' percentages over the OFHEO-directed requirement reflect significant increases over the fourth quarter results, due primarily to the reduction in the OFHEO-directed requirement. Freddie Mac's surplus compared to the statutory requirement remained fairly steady during the quarter. Fannie Mae's surplus compared to the statutory requirement declined, primarily due to credit related losses.

Continue here:

http://www.ofheo.gov/media/capclass/1Q2008CapClass.pdf