To what degree if any has the brokerage industry and it's lobby contributed to the real estate debacle?
1) The lobby
http://www.opensecrets.org/orgs/toprecips.php?id=D000000062
2) President of the lobby(pushing for lax lending standards
http://www.house.gov/apps/list/hearing/financialsvcs_dem/charles_mcmillan_(nar)_mcmillan_testimony.pdf
3. Flexibility for Life Circumstances. NAR believes that a standard for determining a borrower’s ability to repay must be flexible to accommodate borrowers with unique circumstances, such as:
Borrowers who have demonstrated the ability to make monthly payments, over a long term, that are higher than underwriting standards would otherwise allow. Lenders should consider, for example, the borrower’s history of making rent and student loan payments.
Borrowers with high assets but low income who, for cash management or other financial planning reasons, elect a mortgage with a monthly payment that their current income is not sufficient to cover.
Borrowers who anticipate a jump in income or assets due to life events such as graduation, completion of professional training, completion of payment obligations for student or car loans, another member of the household entering the work force when young children start school, or an inheritance
http://www.ncua.gov/Resources/RegulationsOpinionsLaws/proposed_regs/1-16-09-CharlesMcMillian.pdf
The agencies should consider broker price opinions (BPOs) as an evaluation alternative. The proposed guidelines recognize automated valuation models (AVMs) and tax assessment valuation (TAVs) as alternatives available to institutions for developing an assessment of market value. BPOs are prepared by licensed real estate agents/brokers and appraisers with demonstrated knowledge of a local market. BPOs meet the requirements for evaluation tools and often provide more detailed information than AVMs or TAVs
4)The plan
O: State Association Executive Officers
State Association Presidents
FROM: NAR Government Affairs
DATE: 19 June 2009
RE: Fly-In Head’s Up
Please note this notice is going to all state executive officers and state presidents. We will be sending Fly-In details on Monday June 22, 2009 to the states who have Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee. (list of states at end of memo)
There is growing concern in the real estate industry over the implementation of the Home Valuation Code of Conduct (HVCC) and its effect on the use of appraisal management companies (AMCs) by lenders.
NAR is taking the following actions: (Target dates in bold)
1. NAR is scheduling meetings with the Director of Federal Housing Finance Agency, Jim Lockhart to raise concerns about implementation of the HVCC and problems with AMCs and ask for an immediate 18 month moratorium. Director Lockhart is the conservator over Fannie and Freddie who entered the consent order with the NY Attorney General. ( June 22, 23, 24, or 25th)
2. Government Affairs will conduct a fly in the week of June 22. Two members from each Association (State AE/State President or FPC as appropriate) to meet with members/staff of the House and Senate Banking/Financial Services Committee. The ask will be to cosponsor the bill (item 3) and to support an 18 month moratorium.
3. Our legislative team will work on getting a bill introduced in Congress asking for a 18 month moratorium. (week of June 22)
4. We will ask the Chair and Ranking Members of the House and Senate Banking [ Reps Frank and Bachus/ Senators Dodd and Shelby] Committees to write Director Lockhart asking him to grant a 18 month moratorium (week of June 22)
5. We will try and get an 18 month moratorium attached to an immediate pending appropriation bill or other similar fast track bill. (June)
6. Staff will talk to the American Bankers Association who heretofore is fine with the AMC system to see if we can negotiate support.(June 19)
NAR will engage a coalition of Appraisal Institute, MBA, Home Builders and other appropriate trade groups.
7. NAR Research is conducting a survey so we have concrete data information to bring to the regulators and the NY Attorney General’s office . The survey will also be run through the State Association. EHS will be released next week and the appraisal issue will be mentioned front and center in NAR’s release. Survey release June 22
8. NAR is scheduling a meeting with NYS Attorney General Andrew Cuomo and representatives of NYSAR. (June 29. 30)
9. NAR will conduct a Call For Action if we do not get a moratorium in the next week to 10 days
NAR is aware of multiple petitions calling for an end to the HVCC. NAR is taking a more tempered and thoughtful approach of asking for a moratorium during this trouble housing economy.
[less]
NAR is concerned that the proposed risk-weights do not reflect the actual risk of low LTV loans. While there has been a marked increase in mortgage delinquencies and defaults in the past year, the problem has been concentrated in poorly underwritten loans that typically have very high LTVs and other risk factors. We are particularly concerned with the proposed increase in the risk weight for loans with an LTV of between 85 percent and 90 percent. Currently, these loans qualify for a 50 percent risk weight, but under the NPR, the risk weight for these exposures would be increased to 75 percent. We are aware of no experience based justification for this increase, even in light of the current default and delinquency rates. The preamble to the final rule should justify higher risk rates to avoid contributing to the current over-reaction to weak underwriting in recent years. Just as lenders should have avoided “risk layering” because it resulted in too many mortgages doomed to fail, “safety layering” should now be avoided so lenders do not limit mortgage loans to those that are practically guaranteed to succeed. Excessively high risk weights will have the effect of discouraging safe and sound mortgage lending.
Ignored comment.
Unhide
Response by Riversider
about 17 years ago
Posts: 13573
Member since: Apr 2009
Bubble? What bubble says the National Association of Realtors..
http://www.mrlakeshore.com/bubble.pdf Long-term interest rates look very favorable according to NAR and David Lereah, NAR’s Chief
Economist believes home prices will continue to rise, citing the following factors:
• “The simple fact is we still have more buyers than sellers in most of the country,” says
Lereah. “This supply-demand imbalance is continuing to put pressure on home prices,
but we should get closer to equilibrium by the end of the year.”
• Boomers, retirees, boomer kids who are first-time homebuyers, and an influx of new
immigrants buying homes will help keep the real estate market solid. “These
demographic factors all combine for great support for demand for homebuyers going
forward,” adds Lereah.
• Compared to the ho-hum stock market, real estate is still a good place to invest your
money. Says Lereah, “This is also increasing demand for homebuyers and should
continue for the rest of the year.”
Any investment includes risk, including real estate. The constant evolution of numerous events
and factors massage all investment opportunities in ways both good and bad. However, evidence
strongly suggests the Minneapolis–St. Paul regional housing market is robust, sustainable and on
track for continued long-term growth, with home price appreciation expected to settle comfortably
in the 4-6 percent range
Ignored comment.
Unhide
Response by nyc10022
about 17 years ago
Posts: 9868
Member since: Aug 2008
ha
Ignored comment.
Unhide
Response by malthus
almost 17 years ago
Posts: 1333
Member since: Feb 2009
I could think of several worthy successors to Lereah on this board.
Ignored comment.
Unhide
Response by Riversider
almost 17 years ago
Posts: 13573
Member since: Apr 2009
WASHINGTON, July 13 /PRNewswire/ -- The Appraisal Institute, the nation's
largest real estate appraisal organization, today applauded Freddie Mac's
newly revised guidelines for mortgage lenders emphasizing the use of
qualified and experienced real estate appraisers.
Revisions to Freddie Mac's guidelines, issued Friday, instruct lenders
that criteria for hiring appraisers should include one's affiliation:
"Sellers should consider membership in a professional appraisal
organization as a qualification criterion," such as membership in the
Appraisal Institute. Freddie Mac and Fannie Mae, America's biggest buyers
of home mortgages, are consistent in requiring the use of qualified
professional appraisers.
"In this turbulent real estate market, it's more important than ever that
mortgage lenders rely on qualified appraisers with the education and
experience necessary to perform the complex appraisals needed today," said
Jim Amorin, MAI, SRA, president of the Appraisal Institute.
"We applaud Freddie Mac for addressing this important requirement that
will have a positive effect on millions of home buyers and sellers,"
Amorin said. "The recognition of the professionally designated appraiser
has been a missing component in mortgage reform. These new guidelines are
the right long-term solution for consumers and appraisers and will instill
confidence in the safety and soundness of the mortgage lending process."
Freddie Mac's revised regulations are similar to those already employed by
Fannie Mae, which says that among the qualifications that lenders should
review are "the appraiser's education, the appraiser's experience . . .
(and) professional affiliations."
"Professional appraisal designations can be helpful in evaluating an
appraiser's qualifications, particularly when the designation is from a
nationally recognized organization that has formal experience, education,
and ethics requirements that are strongly administered," Fannie Mae's
guidelines say.
The Appraisal Institute's designations have long been recognized by courts
of law, government agencies, financial institutions and investors as marks
of excellence in the field of real estate valuation and analysis.
"To help ensure they get the most accurate appraisal possible - and to
prevent problems from occurring later - it's important that lenders use
only the highest caliber of appraisers. It's a good investment, and it's
simply good business," said Bill Garber, the Appraisal Institute's
director of government and external relations. "Members of the Appraisal
Institute holding the MAI, SPRA or SRA designation have met extensive
experience and education requirements and must comply with a strict Code
of Professional Ethics and Standards of Professional Appraisal Practice."
H.R. 1728, which the U.S. House of Representatives passed in May and which
awaits action in the Senate Banking, Housing and Urban Affairs Committee,
also includes language similar to Freddie Mac's newly revised guidelines.
The bill states that qualifications to be considered when lenders hire an
appraiser "may include education achieved, experience, sample appraisals,
and references from prior clients. Membership in a nationally recognized
professional appraisal organization may be a criterion considered . . ."
"The Appraisal Institute strongly supports H.R. 1728 and urges the Senate
to join the House in passing this important legislation that will benefit
everyone who relies upon accurate valuation of real estate," Garber said.
Consumers and lenders interested in locating a qualified appraiser in
their area may use the "Find An Appraiser" search at
color:0000FF;http://www.appraisalinstitute.org.
The Appraisal Institute is a global membership association of professional
real estate appraisers, with over 25,000 members and 91 chapters
throughout the world. Organized in 1932, its mission is to support and
advance its members as the choice for real estate solutions and uphold
professional credentials, standards of professional practice and ethics
consistent with the public good. The Appraisal Institute advocates equal
opportunity and nondiscrimination in the appraisal profession and conducts
its activities in accordance with applicable federal, state and local
laws. Members of the Appraisal Institute benefit from an array of
professional education and advocacy programs, and may hold the prestigious
MAI, SPRA and SRA designations. Learn more at www.appraisalinstitute.org.
Pushing for high ltv loans..
http://www.realtor.org/wps/wcm/connect/52b954004bb7ed4a94e5dff09f174b6c/NAR+cmt+on+Basel+Standardized+Framework+NPR10-27-08.pdf?MOD=AJPERES&CACHEID=52b954004bb7ed4a94e5dff09f174b6c
NAR is concerned that the proposed risk-weights do not reflect the actual risk of low LTV loans. While there has been a marked increase in mortgage delinquencies and defaults in the past year, the problem has been concentrated in poorly underwritten loans that typically have very high LTVs and other risk factors. We are particularly concerned with the proposed increase in the risk weight for loans with an LTV of between 85 percent and 90 percent. Currently, these loans qualify for a 50 percent risk weight, but under the NPR, the risk weight for these exposures would be increased to 75 percent. We are aware of no experience based justification for this increase, even in light of the current default and delinquency rates. The preamble to the final rule should justify higher risk rates to avoid contributing to the current over-reaction to weak underwriting in recent years. Just as lenders should have avoided “risk layering” because it resulted in too many mortgages doomed to fail, “safety layering” should now be avoided so lenders do not limit mortgage loans to those that are practically guaranteed to succeed. Excessively high risk weights will have the effect of discouraging safe and sound mortgage lending.
Bubble? What bubble says the National Association of Realtors..
http://www.mrlakeshore.com/bubble.pdf
Long-term interest rates look very favorable according to NAR and David Lereah, NAR’s Chief
Economist believes home prices will continue to rise, citing the following factors:
• “The simple fact is we still have more buyers than sellers in most of the country,” says
Lereah. “This supply-demand imbalance is continuing to put pressure on home prices,
but we should get closer to equilibrium by the end of the year.”
• Boomers, retirees, boomer kids who are first-time homebuyers, and an influx of new
immigrants buying homes will help keep the real estate market solid. “These
demographic factors all combine for great support for demand for homebuyers going
forward,” adds Lereah.
• Compared to the ho-hum stock market, real estate is still a good place to invest your
money. Says Lereah, “This is also increasing demand for homebuyers and should
continue for the rest of the year.”
Any investment includes risk, including real estate. The constant evolution of numerous events
and factors massage all investment opportunities in ways both good and bad. However, evidence
strongly suggests the Minneapolis–St. Paul regional housing market is robust, sustainable and on
track for continued long-term growth, with home price appreciation expected to settle comfortably
in the 4-6 percent range
ha
I could think of several worthy successors to Lereah on this board.
WASHINGTON, July 13 /PRNewswire/ -- The Appraisal Institute, the nation's
largest real estate appraisal organization, today applauded Freddie Mac's
newly revised guidelines for mortgage lenders emphasizing the use of
qualified and experienced real estate appraisers.
Revisions to Freddie Mac's guidelines, issued Friday, instruct lenders
that criteria for hiring appraisers should include one's affiliation:
"Sellers should consider membership in a professional appraisal
organization as a qualification criterion," such as membership in the
Appraisal Institute. Freddie Mac and Fannie Mae, America's biggest buyers
of home mortgages, are consistent in requiring the use of qualified
professional appraisers.
"In this turbulent real estate market, it's more important than ever that
mortgage lenders rely on qualified appraisers with the education and
experience necessary to perform the complex appraisals needed today," said
Jim Amorin, MAI, SRA, president of the Appraisal Institute.
"We applaud Freddie Mac for addressing this important requirement that
will have a positive effect on millions of home buyers and sellers,"
Amorin said. "The recognition of the professionally designated appraiser
has been a missing component in mortgage reform. These new guidelines are
the right long-term solution for consumers and appraisers and will instill
confidence in the safety and soundness of the mortgage lending process."
Freddie Mac's revised regulations are similar to those already employed by
Fannie Mae, which says that among the qualifications that lenders should
review are "the appraiser's education, the appraiser's experience . . .
(and) professional affiliations."
"Professional appraisal designations can be helpful in evaluating an
appraiser's qualifications, particularly when the designation is from a
nationally recognized organization that has formal experience, education,
and ethics requirements that are strongly administered," Fannie Mae's
guidelines say.
The Appraisal Institute's designations have long been recognized by courts
of law, government agencies, financial institutions and investors as marks
of excellence in the field of real estate valuation and analysis.
"To help ensure they get the most accurate appraisal possible - and to
prevent problems from occurring later - it's important that lenders use
only the highest caliber of appraisers. It's a good investment, and it's
simply good business," said Bill Garber, the Appraisal Institute's
director of government and external relations. "Members of the Appraisal
Institute holding the MAI, SPRA or SRA designation have met extensive
experience and education requirements and must comply with a strict Code
of Professional Ethics and Standards of Professional Appraisal Practice."
H.R. 1728, which the U.S. House of Representatives passed in May and which
awaits action in the Senate Banking, Housing and Urban Affairs Committee,
also includes language similar to Freddie Mac's newly revised guidelines.
The bill states that qualifications to be considered when lenders hire an
appraiser "may include education achieved, experience, sample appraisals,
and references from prior clients. Membership in a nationally recognized
professional appraisal organization may be a criterion considered . . ."
"The Appraisal Institute strongly supports H.R. 1728 and urges the Senate
to join the House in passing this important legislation that will benefit
everyone who relies upon accurate valuation of real estate," Garber said.
Consumers and lenders interested in locating a qualified appraiser in
their area may use the "Find An Appraiser" search at
color:0000FF;http://www.appraisalinstitute.org.
The Appraisal Institute is a global membership association of professional
real estate appraisers, with over 25,000 members and 91 chapters
throughout the world. Organized in 1932, its mission is to support and
advance its members as the choice for real estate solutions and uphold
professional credentials, standards of professional practice and ethics
consistent with the public good. The Appraisal Institute advocates equal
opportunity and nondiscrimination in the appraisal profession and conducts
its activities in accordance with applicable federal, state and local
laws. Members of the Appraisal Institute benefit from an array of
professional education and advocacy programs, and may hold the prestigious
MAI, SPRA and SRA designations. Learn more at www.appraisalinstitute.org.