Can Mortgage Brokers Still Order Appraisal?
|
May 19th, 2009 12:59 |
The way mortgage brokers are feeling these days they’ve lost the HVCC war and banks have won it and it’s probably just a matter of time before the entire brokerage sector evaporates into thin air. That’s the worst case scenario. The final chapter has yet to be written for brokers, who have bounced back before from what looked like certain destruction (remember 1994?). But the new ‘Home Valuation Code of Conduct’ rule that went into effect earlier this month is certainly a win-win for the nation’s mega-lenders — especially those with appraisal management firms .
Which mega-banks have AMCs? It’s the big four of residential finance: Wells Fargo, Bank of America, Chase, and Citigroup, all of which (of course) are beneficiaries of TARP money.
And what exactly is an appraisal management firm and what do AMCs have to do with the new HVCC? First let’s talk about the HVCC. The way loan brokers see it it’s a regulation jammed down the throat of the GSEs by New York attorney general Andrew Cuomo who (sort of) sees brokers at the crux of the nation’s mortgage meltdown.
HVCC prohibits any and all loan brokers from ordering appraisals on a home whose funding they are facilitating. Just to be fair, HVCC also prohibits retail loan officers at mortgage banking firms (including banks and thrifts) from ordering appraisals. The fear is that there could be a “conflict of interest” because a broker or LO might be able to influence the home valuation by choosing an appraisal firm that’s friendly to them — one that can “bring in” the appraisal so it doesn’t screw up the house sale because said appraisal is less than the home’s sale price. Read More
