I just got wiff of a letter published by a group of eight major banking associations in "scathing denouncement" of the HVCC (Home Valuation Code of Conduct). The group is hyper-critical of the manner in which the agreement was reached and says to OFHEO and the GSE's to withdraw from the agreement.
I have to say, I particularly appreciate the distinguished guests they carbon-copied this doozy of a letter. (see below)
Hat tip, Valuation Review.
From the ICBA website, page 1 of the letter:
American Bankers Association
American Financial Services Association
Consumer Bankers Association
Consumer Mortgage Coalition
Housing Policy Council, The Financial Services Roundtable
Independent Community Bankers of America
Mortgage Bankers Association
Real Estate Services Providers Council, Inc. (RESPRO®)
April 30, 2008
The Honorable James B. Lockhart III
Director
Office of Federal Housing Enterprise Oversight
1700 G Street, N.W.
Fourth Floor
Washington, DC 20552
Dear Director Lockhart:
The undersigned are writing to register our concern with the serious legal and policy questions that are raised by the proposed Home Valuation Code ("Code"), which Fannie Mae and Freddie Mac (the "GSEs") have agreed to adopt, pursuant to a written agreement ("Agreement") with the Office of Federal Housing Enterprise Oversight ("OFHEO") and the New York Attorney General (NYAG). We agree that accurate appraisals are a critically important component of sound mortgage lending and that appraisal fraud is a factor in many cases of mortgage fraud.
We have very serious concerns with both the manner in which the Agreement and the Code have been mandated by OFHEO and the NYAG as well as the substance of the documents. (For simplicity purposes, reference herein to the "Agreement" shall include the Code.) We believe that OFHEO should withdraw its assent to the Agreement, should not permit the GSEs to implement the Agreement, and should take steps to assure that this type of rulemaking by settlement does not occur in the future. The Agreement is in violation of Title XI of FIRREA and permits the NYAG to unlawfully exercise authority that resides exclusively with the Federal Government. The method of imposition of the agreement is in violation of the Administrative Procedure Act and constitutes an unlawful delegation of authority by OFHEO to a third party. For a variety of reasons, the Agreement is not consistent with the best interests of the GSEs, the housing finance markets, and other aspects of public policy.
Continue 14-Page Letter In PDF
cc:
The Honorable Sheila Bair, Chairman, Federal Deposit Insurance Corporation
The Honorable Ben Bernanke, Chairman, Federal Reserve Board
The Honorable Roy Bernardi, Acting Secretary, U.S. Department of Housing and Urban Development
The Honorable Andrew M. Cuomo, Attorney General, State of New York
The Honorable John Dugan, Comptroller of the Currency
The Honorable JoAnn Johnson, Chairman, National Credit Union Administration
The Honorable Henry M. Paulson, Jr., Secretary, U.S. Department of the Treasury
The Honorable John Reich, Director, Office of Thrift Supervision
See Also:
Fannie, Freddie and Cuomo's Testicular Choke Hold
An Industry's Fall from Grace - A Few Words About the HVCC
Fannie, Freddie and New York AG Strike Agreement on Appraisal Code of Conduct
UPDATE: OTHER RELEVANT LINKS
Here's the Appraisal Institutes' April 30 opinion summary on the HVCC:
http://www.appraisalinstitute.org/ano/current.aspx?volume=9%20&numbr=7/8
...and the letter issued by the Insitute co-signed by the ASA, NAIFA and the ASFMRA:
http://www.appraisalinstitute.org/myappraisalinstitute/downloads/AI-ASA-ASFMRA-NAIFA_HVCCFinal.pdf
(Update: Added links, emphasis for clarity)
ADDENDUM 05/16/2008: Courtesy of Appraisal Press, list of formal responses from various organizations.
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It's no doubt that the entire industry isn't on board with the agreemnt as written. The reality is that the entire HVCC document is little more than a "stay out of jail" ploy by a dishonest lender who got caught raping the consumers. Recent article on MSN detailing all the wealth bestowed upon parachuting CEO's who have overseen the creation of this mess. Just like appraiser licensing of 20 years ago following the S & L crisis, the lenders will try to dismantle any governing regulations before enactment which hinders their profits at the public's expense as they've done over recent years. Once they get their "Get Out of Jail Card", it will be business as usual.