CFPB Says No Appraisal Needed on Homes $400k and Under
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CFPB Says No Appraisal Needed on Homes $400k and Under
admin - Thursday August 22, 2019
And here comes the wind of foreclosures! And Freddy they did learn. That’s why their doing it. It’s a cycle. They know exactly what they are doing and why.
I have worked every angle of the real estate world over the last couple of decades and have been an appraiser for last 10 years. I can say that responsible lenders have always required an appraisal on every loan, even those under the old $250,000 mark. They will continue to do so on those under the $400,000 mark. The appraisal makes the loan a safer investment in the secondary market and protects the buyer and lender from making a potentially terrible mistake. Now, I do know a number of “fast and loose” lenders who try to skip the appraisal at every opportunity. They will eventually crash and burn. Sadly they will leave a wake of destruction as they do so. It is absolutely insane to remove the only unbiased person from the transaction!
amen
Just goes to show ya that ALL “regulation” and “concern” for the public trust is a sham. The gods on Mount Olympus know best. Ya’ll remember that when the next crash destroys your life.
Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, CFPB is charged with overseeing the Federal financial laws that specifically protect consumers—people who keep their money in banks and credit unions, pay for goods and services with their credit cards, and rely on loans to buy homes …Jan 4, 2012
what protection has it offered?
it started with Dodd frank.
2010
while the last admin fed the bond and didnt care about making sure the market healed
To “Valencia”:
If you think the appraiser gets that $550, you’re sadly mistaken. The lender-owned AMC gets about $200 of that. Please define “bad appraisal”. I’m assuming that it’s one that didn’t make your sale price. Appraisers are not there to rubber stamp your contract. If you want things to change, vote all Democrats out. While you’re at it, get an appraisal certification and talk to me after you’ve been an appraiser for 35 years. Now, I’ll get back to work explaining to underwriters that water wells and septic tanks are normal in rural areas. If you think Barney, Chris and Andrew did America a favor, you’re also sadly mistaken.
Hey, let’s just get rid of all humans in the real estate industry, especially the ones who are supposed to be impartial … the appraisers, the inspectors and the surveyors. While we’re at it, let’s also get rid of real estate agents. I mean, all they do is drive around with too much makeup on and turn keys, right? Let the lenders have it, they’re going to get it anyway, one way or another. And, vote for Hillary next time. Maybe Andrew Cuomo can be her running mate. Promote Maxine to Empress of the Universe too. The “squad” and Nancy will take care of you.
and this is the point we should all see
Thank you for this!
I have checked both the CFPB’s and FDIC’s websites but do not see this posted on either…where can a press release of this be found?
Can you post your references?
I searched CFPB and FDIC and am not finding it. Also, if the appraisal is waived, then who makes sure the house meets FHA, USDA, or VA conditions? (no peeling paint, dry rot, earthquake straps, carbon monoxide detectors, cracked foundation, etc…)
Most people missed or didn’t know that the limit had been at $250,000. This comes into play mostly with HELOC’s and products that are similar that the banks do. It’s been that way for years.
What buyers need to do themselves is go on the county’s website and look at the recent sales history so they can make an educated guess. Miami Dade County has a really good site for property sales. You can filter, select subject property, comparable properties etc. You can search by year.
I have never given Zillow a dime as an exclusive buyers agent. I have been saying for years to colleagues to stop feeding the monster as it is out to gobble us up and put us out of business.
thanks for covering this, I am an appraiser and have been aware of this for over a year, the waiver change was proposed a while ago and appraisal organizations [puny lobbying groups] have been fighting this all the way . . . I am not surprised in went through given the current political environment. Once again the appraisal industry has been turned on its head. But!!! actually more important than this is the growing widespread use of the hybrid/bifurcated appraisal, a new form is coming [1004P], many AMCs have their own Proprietary Form which are a total joke . . . this is still an appraisal but might as well be a waiver – look into this hybrid/bifurcated appraisal process, I think you will find it shocking a good fodder for an episode. I watch the show almost everyday, thanks for doing what you do!
I agree that appraisals are necessary to determine condition and value of a property. Appraisers lose credibility when they MUST have a copy of the contract with PRICE before they will do an appraisal. Don’t most of your appraisals come in at the exact sale price–after all– a property is worth what someone is willing to pay. The appraisal is supposed to be a unbiased value of the property. But I fear that most all appraisals are in fact biased by the number on the contract. Also another gripe I have—why does it take 2,3,4,5,6 weeks to get to a closing. I can buy a car with a loan in a matter of hours. Seems there is something we could do to shorten that time in escrow.
The appraiser is REQUIRED to look at a copy of the contract, if the transaction is a sale. The 1004 Appraisal form has a sales price field that MUST be filled in if it is a sale. The Appraiser has no discretion about this. We do plenty of appraisals with no sale price – for refinances. I have been an appraiser for 41 years & would be perfectly happy to do appraisals for sales with no contract & no sale price information, but we can’t. It is required. Change the requirements & change the forms. That would be fine with me & lots of other appraisers, but until then, we have no choice except to complete the reports in the required format.
It appears that you have never looked at an appraisal report. Getting a copy of the contract if the transaction is a sale, is MANDATORY. The Appraiser is REQUIRED to fill in the sales price, contract date, etc.on the form, if it is a sale & not a refinance. I have been an appraiser for 41 years & am perfectly happy to do appraisals for refi’s where there is no contract, but for sales, this is NOT DISCRETIONARY for the appraiser.
Appraisers have no choice about the sales contract; it is a USPAP REQUIREMENT. The appraiser MUST analyze the sales contract terms in order to determine if the terms are common to the subject property’s local market area, or if they require an adjustment when compared to the comparable sales contract terms and/or sales concessions. The report can be completed WITHOUT the appraiser seeing the sales contract, but it will NOT be accepted by the lender. —– Everyone that depends on a professional appraisal, should familiarize themselves with at least the basic 1004 UAD appraisal form. On page 1, under the “Sales Contract Section”, the appraiser MUST check one of the 2 boxes…”I did” or “did not” analyze the contract for sale…” if it is for a purchase transaction.
Thanks SO much guys for sharing this info! Great video!!!
As an appraiser, and a member of one of the state appraiser groups that signed the letter you mentioned, it always amazes me just how little real estate agents and mortgage brokers keep up with what’s happening in “Appraisal World”. So I’m thrilled to see this discussed on your show!!
Appraisers and appraiser organizations have been fighting this kind of garbage for the last several YEARS. The 30 appraiser organizations you mention in the video have been in existence for YEARS. They actually joined forces and formed the “Network of State Appraiser Organizations / NSAO – see their Facebook page here…https://www.facebook.com/stateappraisalassociationworkgroup/
The NSAO represents 30 states across the US and even more than 30 different professional appraiser organizations. NSAO has been meeting with various regulators and legislative representatives since their inception. They have been a part of writing MULTIPLE letters to various regulators and legislators. NSAO is actually the workgroup that contacted the attorney you mention in your show. This 30 state network has been instrumental in working to effect positive changes that benefit us ALL in the real estate industry.
There is an organized, concerted effort behind changes that “by-pass” appraisers. It’s NOT about appraisers losing work…it’s about PROTECTING THE PUBLIC AND PROTECTING AN INPORTANT PART OF OUR ECONOMY. We all know what can happen when real estate goes in the toilet.
The professional, licensed, certified, real estate appraiser is the only party in a real estate transaction that is specifically trained and tasked with remaining unbiased. Take us out of the equation and it can only lead to disaster.
Thanks again for sharing and spreading the word. We ALL need to pay attention to changes in appraisal products and requirements. THIS is just the tip of a really big iceberg.
Could you guys be overacting here? The appraisal exemption WILL NOT apply to loans sold to or guaranteed by FHA, VA, HUD or Fannie and Freddie. This only applies to in-house bank loans that are originated by and remain a part of that bank’s portfolio. This is a much smaller number than you are presenting in this video and would have represented less than 10% of all mortgage originations in 2017 if the $400k exemption were in place then.