Today, Freddie Mac and Fannie Mae announced that effective May 1, 2009 a new Code of Conduct for the realiability of Home Valuation for Single Family homes will be implemented May 1, 2009.
To strike out and "lash" out at appraisers leading it to be something that may have caused the downfall on bad loans being sold because of false or misleading valuations needs to sent down the Grand River!
Where I think the changes need to be in place are:
When a SFR property is over $500K in value, then two appraisers who have evidence of appraising upper bracket properties that are filed with the local board, should be the only ones to appraise.
An appraiser should be on an apprenticeship like they do in Michigan until they reach a certain level of quality work and number of apppraisals and courses.
Until such time, an appraiser should not be allowed to inspect the property by himself/herself until those qualifications are met.
As far as ragging on appraisers, I take this new finding as an insult because there are some pretty good appraisers out there and for them to be "dumped" on again after the last dumping in 1960's, this is for the birds!
I believe that they should have also required that any property over a certain selling price should be required to put 20% down and no PMI allowed.
I also believe that the fallout of these bad loans on single family, condos, and 2-4 units is a direct result of, but not limited to, the stated income program.
I feel that the buyer of a home should have 6 months worth of mortgage payments in their savings to qualify when they purchase a home. Strike as it may be, I'm not happy when appraisers are getting the lashing of the yard stick!
Underwriting: I don't know who is doing the underwriting but I'm seeing false, blattently false VOE's, income, Income Tax Returns that do not match the income level that is on the loan application. Heck, some of these companies say that people work at "x" but they have never even checked the registry to see how many people actually work at this place of business or even if it exists!
I believe that in due respect for those appraisers and loan officers who are professionals, I think that a program should be implemented on how easy it is to get into either industry as well as Real Estate Agents. Anybody can become an appraiser. It is so easy and who is to blame but at the State level. Granted there are attorneys and doctors that got "c's" in some classes but they had an apprenticeship and worked in areas where they excelled.
So, now that I'm off my soapbox about insults to those who are professionals, here's the post that just came out.
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