Representative Fights Dodd Frank Bill - 01.07.11
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Appraiser Micro: (January 10, 2011 1:15pm)
Free market forces will work in tandem more logically when many home related industries promote complete home ownership and longer term stability in the markets is achieved. / Daggone - you need a 3rd opinion to know which appraisal was most credible. Field or desk reviews might suffice. An objective position to take would be to note that the appraiser works with "other peoples numbers". Market data should help you determine which appraisal is more credible, and that should be considered separate from any contract figures.
brit1: (January 10, 2011 11:58am)
Insurance premiums are based on the actual projected cost of labor and materials to repair or replace your damage whereas comp appraisal values are based on the figure the last foreclosure or short sale realized in a depressed market. Sure you can buy a torn up piece of crap for pennies on the dollar but when you come to repair it, let's see if your licensed contractor gives you a knock down price. Hardly the same, eh guys?
jimwikey: (January 08, 2011 1:03pm)
Yes, Michelle Bachmann may be 'hot', but she's another Palin wantabe who's great at self promotion and lacking severely in brains. I know that I should want the Dodd/Frank bill to be rescinded, for my own financial benefit, but I wonder what the de-regulation of Wall Street and the Big Banks will actually do to harm not just my job but the country as a whole.
W.R.Buchanan: (January 07, 2011 7:31pm)
This Bank is trying everything in their power to NOT make this loan. The people were told that they should consider a quick sale to avoid foreclosure (which they are in no danger of unless MERS is screwing them) It is in the banks best interest for them to lose their home as the bank will make a profit because the FED will give them our money to "make it right". So no reason to do business. Unless guys like Darryl Issa and Michelle Bachmann reign in these bankster A-HOLES this country will fall. They don't care as they can and will move to where the pickins are better. Many have already bought huge tracts of land in China! The banksters have already successfully stolen or nulified every bit of equity on property in this country. The only thing left is the debt, and the only logical reason for this is the complete destruction of our financial system, and by extension our country. I call that TREASON, and you all know what the sentence is for that. Death by Bonga!!!
W.R.Buchanan: (January 07, 2011 7:07pm)
PenelopeX: I had an appraisal in Oak Park CA. Oak Park is in Ventura County just above Agoura Hills which is in LA County both are off Kanan Road. The loan was going to Chase, I foundout after the fact, or I never would have taken the job. I did the appraisal in Oct and again in Nov and came in both times at $675K for a tract house in excellent condition on an 18K SF lot Pool/Spa remod etc. I received a review after the second time by a woman in San Diego along with the 19 page Corelogic Underwriters breakdown of my work. It/sh used Comps from LA County, it said the area was Urban when it is clearly tract houses for miles. It used every non similar REO in a .5 mile radius to kill the value to $600K. I rebutted all of their "questions" with the simple facts. They called us the day before Xmas and wanted us to recertify an appraisal that was less than 45 days old. I said F Off!
Divedude: (January 07, 2011 12:23pm)
PenelopeX: Originators getting soaked for the AMC cost is a new one on me. Is it possible that the broker wants to look like the good guy and not let the consumer bear that cost? Up until now it's just been the appraisrs and the consumers. However, I've gotten calls recently from wised up consumers about this. As for appraisers performing review appraisals without that state's license, report his ass along with the AMC!! It's still an appraisal if you render a value. Any progress we make as appraisers will be nullified until we get rats like that out of our business.
lendermen: (January 07, 2011 12:14pm)
A you owned a tuck tuck you might make a buck buck.
PenelopeX: (January 07, 2011 12:09pm)
Hey, AppraiserKG...could you email me about the information you have about insurance companies using AVMs to assess cost replacement value for their clients. This is a very interesting conflict-of-interest issue and I'd very much like to pursue research on this. [email protected] Thanks!
PenelopeX: (January 07, 2011 12:08pm)
Hey, AppraiserKG...could you email me about the information you have about insurance companies using AVMs to assess cost replacement value for their clients. This is a very interesting conflict-of-interest issue and I'd very much like to pursue research on this. [email protected] Thanks!
Swarm The Banks: (January 07, 2011 12:05pm)
JR Mckee, I recall an insurance agent mentioning that the insurance companies bought 20 year CD's during the Jimmy Carter era with interest rates around 15% to 19%, and when they expired in 1999, they had to start raising premiums to make up for that lost residual income.
PenelopeX: (January 07, 2011 11:57am)
One more small question for the group... I'd really like to know if any of you have experienced appraisal reviews being done by appraisers outside their area (logistically) of expertise. Like the broker who relayed to me his client was turned down for the purchase loan because he couldn't come up with the cash difference between what the review appraiser from another state said the local home was worth versus what the true market stats (via CMA from local Realtor prior to offer and BPO from bank's asset mgr. prior to listing) and local appraiser's valuation opinion. I've heard many l/o's and Realtors are furious about out-of-area appraisers slashing local markets. Think the AMCs and banking cartel might have their grubby little pin-heads working on market manipulation here? Things that make you go hmmmmm!?
PenelopeX: (January 07, 2011 11:49am)
And, that is exactly what happened with all these AMCs cropping up like 7-11s on the street corner. AMCs have been around for over 20 years, but never "officially" mandated until the HVCC came along and now the Final Interim Rule. You see, once the GSEs and FED have sanctioned their use, and used their jargon in their guidelines for doing business, they're "officially" recognized as the modus operandi to do business with them. It is quite unfortunate that there is no one out there enforcing ethics and checking behavior and our "representatives" in Washington are too busy legitimizing their job security with bogus "oversight" committees. Nothing changes, there is no qualitative difference in the way business operates as a result of their ineffective actions in Congress. Their job is to confound business professionals with monetary double-speak and it's our job to read between the lines and make sense of it all. By that time our brains are all too tired to do anything about it.
Stephf: (January 07, 2011 11:43am)
I'm sure that these tax deduction questions are brand new for the CPAs too, they'll be seeing both types of HUD1s this season (with and without YSP credit back)...so they must be doing their own research on this. Thanks all for any feedback/info
PenelopeX: (January 07, 2011 11:42am)
Hey, DiveDude...got an questions for you...Regarding your comment, "This expense is the bank's respnsibility. Period! You have never heard anyone directly defend this payment system because it is not defendable. AMC's were not mandatory under HVCC nor are they now." Are you aware that some brokers are charging their loan officers for the difference between what the appraiser gets and the charge the AMC levies against the broker for the AMCs fee? Well, it's true. I found this happening not in just one local brokerage, but in two in CA. Their rationale is that the bank is passing the cost of assessing the risk on to the originator of the loan process. I'm hoping this practice doesn't start spreading, but the banking cartel has everybody by the "kishkas" and after all, they've got the power to create the $$ and they're in control of the ledgers, so if they want to pass along the cost of doing business to the little guy (because they little guy needs them), then they'll suck it up.
Daggone: (January 07, 2011 11:29am)
I LOVE that the discussion always comes back to AMC/HVCC. Got an appraisal yesterday after 2.5 weeks. Came in $33,000 under contract price. First time I've ever had an appraiser look at a contract and give me a different value. This is a FSBO, buyers really want this house, so they called the seller's bank who did an inflated appraisal in November using 1+ yr old comps. Sellers bank (First Equity) called the appraiser ran the comps by him that my lender did. Appraiser assured L O at First Equity that the value would be there. Guess I've lost a deal to First Equity because they are allowed to call their appraiser, same one over and over, and appoint him to the job. Should they be able to do this? Other deal that was to close today went down due to AMC appraisal. Appraiser refused to add a comp for lender.
mmn: (January 07, 2011 11:16am)
StephF, I also have a call into my CPA and am waiting for a call back. Interesting question though, huh? I also send copies of HUDS to all my clients from the previous year and then I reference the items to discuss with their tax advisorm (RD Guarantee, VA Funding Fee, etc). Also, I'm wondering on a refi, can the Origination Fees be deducted over the life of the loan like Points are. I'll post what I hear back from my CPA and I hope you do the same.
Stephf: (January 07, 2011 11:10am)
I was JUST about to post the same tax deduction question, and have consulted my CPA. Now that the Origination Fee bundles underwriting/processing costs with point(s) charged, is the whole thing deductible? And more to the point: the YSP credit back to borrower appears on the HUD1s for our brokerage. However, there is no SRP disclosure (nor credit to borrower) ever itemized on a HUD1...does that mean that a borrower who went to a bank for financing could use the whole Origination Fee deduction, while a borrower who utilized a broker could only deduct the NET Origination Fee - Origination Fee minus YSP credit back? We customarily mail out copies of HUD1s to our clients right about now, more as a "touch" than anything else, but I do like to know in advance how a tax professional would read it, and whether my clients would gain a greater deduction advantage with a bank. Thanks
CTC: (January 07, 2011 10:47am)
Hey F & B: 2 questions...When you say "tuck tuck", you arent referring to the end of the Silence of the Lambs movie are you? Anyway, any word on you guys doing a video training on the Bay Area that you did in Texas?
mmn: (January 07, 2011 10:32am)
I have a question regarding the 2010 Settlement Statement terminology "origination charges". Based upon IRS Publication 936 which references that "Points" may also be called "Loan Origination Fees, Maximum Loan Charges, Loan Discount or Discount Points", so does that mean these numbers are now tax deductible?
ATLMTGMAN: (January 07, 2011 10:31am)
tpetajr: My experiences with Franklin American have been nothing but positive. Their underwriting is standard, but I have been able to take a difficult file to second level and have them see the person behind the application. They approved a file for me that no one else would. they are approachable and look at the individual beyond the application. I have nothing but praises for them and wish I could give them all my business.
ATLMTGMAN: (January 07, 2011 10:30am)
tpetajr: My experiences with Franklin American have been nothing but positive. Their underwriting is standard, but I have been able to take a difficult file to second level and have them see the person behind the application. They approved a file for me that no one else would. they are approachable and look at the individual beyond the application. I have nothing but praises for them and wish I could give them all my business.
Old Dog: (January 07, 2011 10:29am)
Penelope.X I've have been appraising for over 37 years, raised my fees to match others in my rural area in 1995 to base of $400 (FHA paid the same shortly thereafter). Along came the big shops where people were given little training and a fee split, say $250. So as their numbers grew in the industry, along came the AMC willing to give them a "full fee" of $300. OH BOY, looks good to them, striking out on their own. No wonder the national average that exists is at $350 as that same survey indicated 54% of these people were not even an appraiser in 1995!! So they don't even know what they have done to themselves and our profession. BA degree, continuing education, designation, years of experience means nothing because now I must produce reports twice the size, twice the time earning about $25 an hour instead of the $75 I use to earn. Lawyers bill at least $200 an hour and I'm wondering about how the fees have changed since 1995 for the title companies and the loan processors, etc
LoanKing: (January 07, 2011 10:26am)
Insurance rates went up for a couple main reasons – there were a lot of losses due to horrific hurricanes in Florida and other weather related issues – even causing many insurers to not write new business in Florida. Also during that time the market returns of investments the Insurance companies had invested dropped like lead balloons – like our portfolios did. With the huge losses and much smaller investment returns – to keep their reserves in line they had to raise rates. There was also a smaller issue that during that time the price of building materials went way up which pushed the repairs costs/claims higher. That’s the real reason home insurance rates went up – not the prices of the home themselves.
W.R.Buchanan: (January 07, 2011 10:18am)
If Michelle Bachman's bill is an indicator of what is to come from the Rep Congress we might still be in business in a few years. However Obama choosing Daly as his Chief of Staff is not good for any of us. As the exCEO of JPM/Chase AND the son of the Chicago Daly's. This guy not only knows how to play hardball he knows how to feed his bankster friends enough perks to fill the Queen Mary to the gunwales. This guy will do everything in his "enormous power" to make sure the banks get everything they want and more. This could spell touble for us in the biz. Randy
Divedude: (January 07, 2011 9:54am)
The whole dynamic of how an AMC is compensated has never been specifically adressed. This expense is the bank's respnsibility. Period! You have never heard anyone directly defend this payment system because it is not defendable. AMC's were not mandatory under HVCC nor are they now. Reliable, third party alternatives that are available a a fraction of the cost and used by many regional banks are never discussed. Dodd & Frank know this. Who do they wok for?
tpetajr: (January 07, 2011 9:41am)
Not to get away from the Insurance debate, but if anybody out there is doing business with Franklin American, you won't have to worry about Insurance. thier underwriting is so brutal you won't make the deal.
GODLIKE: (January 07, 2011 9:39am)
I still have and still wear the Tshirt with that pic.
CarlHendrixLoans: (January 07, 2011 9:35am)
Great information as always. HOI rates in Florida have actually come down considerably in the last year or two. Of course we were hammered by huge premiums for the first several years after the '04 hurricanes so anything less looks great to us... btw, I used to have that Farrah poster (sigh...).
GODLIKE: (January 07, 2011 9:35am)
Here's an interesting link - 58 houses being sold in a block on eBay. http://www.mlive.com/news/flint/index.ssf/2011/01/package_of_58_flint_houses_for.html
Blackadder: (January 07, 2011 9:15am)
Re: Insurance companies. Originally this was a mutual industry - the premiums represented pooled risk, and if claims dropped, so did premiums. Now majority of insurance companies are market listed, so are looking to generate increasing profits to keep Wall Street happy.
PenelopeX: (January 07, 2011 8:59am)
Please feel free to visit any of my websites to find out what appraisers and concerned citizens are trying to do to educate our community; www.pgappraisal.com, www.acsc-mc.com or www.district49.net. Come on by...we'd love to have you!
PenelopeX: (January 07, 2011 8:57am)
And, BTW, market or no market, appraisers by and large haven't raised their standard fees in years. It's just that most of us have always had to resort to chasing the business, and AMCs have stepped in to profit from a dilemma when the VA has been working within those parameters quite nicely for years now. Why do we need AMCs to profit as the "middle-man" buffer between the appraiser and the lender, when the VA rotational system of ordering an appraisal based entirely on demographics and competency without lender input has been working well for all this time? Someone should be asking the obvious common-sense questions and demanding competent answers. Who's benefitting from the existence of an AMC?...follow the $$ and the power...the FED and once again, their cronies.
PenelopeX: (January 07, 2011 8:50am)
In answer to "tlc"s question about appraiser fees, just wait and see what the FED and their cronies come up with for "customary and reasonable" according to the market. According to my statistics, there is a national average that exists at about $350 - $400 for a 1004 with MC addendum. Anyone else want to weigh in and confirm this...no price fixed here, just some friends sharing "market" data. ;-)
PenelopeX: (January 07, 2011 8:44am)
As an appraiser, I see Frank/Dodd being a very dangerous piece of legislation sponsored by the FED, which is really 'nuff said. Their Final Interim Rule has so many grey areas, especially the part about lenders being able to accept reports even though they know the appraiser may have been influenced and the appraisal tainted, just so long as it appears to reflect the market...direct violation of USPAP involved here. Also, how many in the lending industry are aware that violations of USPAP are occurring every day when a review appraiser is working outside the scope of their expertise by reviewing appraisals for AMCs in other states where they're clearly not licensed? BofA is a hugh culprit...but, many more are engaging in this very unethical practice...where are the USPAP enforcers when you need them. And I totally agree with Real Estate Nate that Ms. Bachman is a "hot" windbag bucking for a promotion, as is my rep, Darryl Issa, actually he's more like a derigible on steriods!
Bob w: (January 07, 2011 8:44am)
Relative to insurance homeowner rates. First, rates not pricing (pricing being a reflection of the home values which drive premium.) have gone up. Over the last 10 years, we have had several natural disasters: Katrina, Flooding in the Midwest, etc. ( I am not the weatherman- you check them out.) Thus rates have gone up Nationally to actuarially compensate Carriers for these catastrophic losses. However, it is always wise to review your policy with your agent. The building limit is the estimate of replacement cost of the building. Due to the soft economy contractor costs have come down. However, the offset maybe the cost of materials. they have increased due to the many catastrophic losses and demands by other economies like China. Your building limit has little to do with home prices. Lastly, often your value is increased annually by an inflation factor. This may be why your home is overvalued. Check it out!
tz hawg: (January 07, 2011 8:41am)
Funny, my homeowner's has gone down. If people want lower insurance, they should shop and make sure they are not over insuring. Even with values down, they have to make sure they have the mortgage(s)covered as well. I also think there is significant validity to the response below from JR McKee.
doncamp2: (January 07, 2011 8:25am)
Love the Farah poster!!! did you get that out of my room? :)
tlc: (January 07, 2011 8:15am)
So if the Frank/Dodd bill is killed, what does that do for "ususal and customary" fees for appraisers that were supposed to take affect on 04/01/11?
JR McKee: (January 07, 2011 8:12am)
So here's what happened with the insurance premium increases you've discussed this morning. In talking to my insurance agent and raising the same complaint in recent years, he explained as follows: Insurance companies during the late 90's and early to mid 2000's, made huge returns off their stock and real estate holdings as both of those investments went off and spun off great returns for them. In a competitive environment many of them to capture market share reduced their premiums to homeowners and we saw lower cost insurance policies. Fast forward to 2006, 2007, 2008 ++++, as those investments have not performed well, lost value and return on investment, the profit that had been realized from those investments which was subsidizing actual premium costs went away. With no subsidy income from these investments, the only choice insurers had was to raise premium to make up for the subsidy they had provided Here's to our mutual success!
GWent: (January 07, 2011 7:52am)
Facebook? Headed for disaster? HELL YES! Having an idiot egomaniac at the CEO post is no help. So, Zuckerberg gives away 100 million to charity, then a few weeks later borrows 500 million from Goldman Sachs? If that isn't a recipe for losing your company to investment banker snakes I don't know what is! Zuckerberg, with his unmitigated ego and greed deserves everything that happens to him. Guys, if I built a business that someone was willing to pay 500 million for - after 3 years on the job - I'd say, WHERE DO I SIGN! Mark missed the boat, and now he's riding the Led Zeplin into the ground...All becuase he can't stop thinking of himself as the center of the universe!
bob.smithson8: (January 07, 2011 7:41am)
Hey guys, what happened to Brilliant...Brilliant? Give me some more! Have a great weekend.
epeltier: (January 07, 2011 7:37am)
Bachmann is a nutjob who's just stealing from the Palin Playbook. She's not good for politics and, no, she's not hot.
gbracht: (January 07, 2011 7:22am)
Brian and Frank, think Hazard Insurance has gone up, look at Flood Insurance Premiums! Even in areas within a 100 year flood plain, over the last 10 years they have skyrocketed. Florida and SE hurricanes affecting everyone else? Guess so.
frankgaray: (January 07, 2011 7:21am)
Mikecgroup - send an email to [email protected] and see if our IT guys can help.
AdMospheres: (January 07, 2011 6:50am)
re: Frank Dodd bill, aka the Federal Reserve Empowerment Act... let's not forget that one of its measures is to make the SEC immune/exempt from any Freedom of Information Act requests. I think I learned that here at TBWS. It's a BS piece of legislation. Much like the Patriot Act, its effect is the exact opposite of its namesake. Wall Street Reform Act, my ass.
Bono Vox: (January 07, 2011 6:36am)
Frank actually looks good in front of all of those guys. Nice playoff beards, boys. Michelle B defines Coog. Forget about elections, Republicans have managed to corner the market on elected hotties. Bring that Tuk-Tuk or Tic Toc or whatever to open houses, football tailgates, the parking lot of homeshows (avoid the $5000 booth fee), neighborhood events - could work and it's cheaper than those season tickets that don't really generate the business you expected.
mikecgroup: (January 07, 2011 6:31am)
PC platform has dies and gone to a fire-fill eternity in dell. I have downloaded ADOBE more than once and still no video on the NEW MAC! Any idea how to get the video back? Please? Mike C [email protected] 800-979-6453
MNREagent: (January 07, 2011 6:16am)
I just went in and did an insurance review with my agent. By simply arguing the fact that I could rebuild my house for much less than I was insured I was able to have checks sent back and rate reductions on all properties. Three checks on three houses totalling nearly $800! That's like having a closing in MN! Schedule a review.
Real Estate Nate: (January 07, 2011 5:49am)
I agree that Frank/Dodd is overly reactionary and that it paints an unfair picture of the mortgage industry - especially those who are left in the industry. However, Bachmann is my Rep and I see her tactic as more of an attention grabber than actually trying to successfully repeal Frank/Dodd. She has talked about running for President in 2012. Remember, not much is done by either side of Congress that isn't designed for PERSONAL gain instead of the gain of the people.
crodent: (January 07, 2011 5:45am)
Insurance premiums are based of course on the cost to rebuild the home minus the value..with that said, here in good ol Alabama as I am sure elsewhere, many homeowners allowed their insurance companies to be scammed for new roofs to boot. I personally needed a new roof & can't tell you how many roofers tried to get me to file a claim citing hail damage. The roof was 24 yrs old it was old not hail damaged. We all pay when insurance companies have high unanticipated claims. Needless to say, most people I know saw an increase & roofs/hail damage were cited as the reason. So, people saved a few bucks on a roof and thousands gave the insurers a reason to increase the rate! Sounds like welfare theory with this homeowner make many pay so you can get a semi-free ride.
appraiserKG: (January 07, 2011 5:43am)
Hey Guys, an new angel for you to hit upon. As an Independent Fee Appraiser I use to work for homeowners needing to establish Replacement Values for insurance coverage for their homes. I was recently told Insurance Companies will NO LONGER accept value information from State Certified Residential Real Estate Appraisers. The only exception is the State owned company, Citizens. Instead, Insurance Companies are now utilizing a AVM (computer quote)designed by- yep you guessed it- Insurance Companies. No longer considered reliable is the information provided by Marshall & Swift; the 100 year old company based out of Chicago which is the leading authority on Construction Cost information. For example; I know the replacement value of my home is $280k. Per the insurance company AVM's, yep your guessed it, $420k. Can you say extortion! Look up the definition in Websters.....
tomnoo: (January 07, 2011 5:15am)
As a former insurance agent currently married to an insurance company executive, your question is a great one. Insurance theory which is used by all insurance carriers, commercial, private, or even by Uncle Sam is that for every dollar of premium there is a desire to pay $65.00 in claims. The tremendous natural disasters of the mid-2000's requires replentishment of the insurance company reserves. Once that happens, the natural pricing caused by a free market will start reducing premiums. Of course, your point about increased homevalues and cost of labor & materials will also affect the speed premiums come down.
Michigander: (January 07, 2011 5:05am)
HOMEOWNERS INSURENCE WILL DROP WHEN THE COST OF MATERIALS AND LABOR DROP PROPORTIONALLY TO THE DROP IN HOME PRICES.
USDAman: (January 07, 2011 4:36am)
A tuck tuck to make a buck buck? Interesting idea!
Divedude: (January 07, 2011 4:05am)
A Tuck Tuck with your logo? Smashing idea! Just like the Oscar Mayer weiner car. Makes my hungry just thinking about it!
Swarm The Banks: (January 07, 2011 2:10am)
As for your earlier point about home mortgage modifications, I have come to the conclusion that HAMP is basically an evil program for anybody who is rejected, aka one million homeowners and I wrote an article about it here. http://parallelforeclosure.blogspot.com/2011/01/us-government-may-be-using-hamp-to.html How do you guys feel about foreclosure mediation?http://swarmthebanks.blogspot.com/2011/01/foreclosure-mediation-being-forced-down.html Do you think appraiser and realtors could also make good mediators, cuz that could be an area that soon may require much more mediation than we are presently seeing.
Swarm The Banks: (January 07, 2011 2:05am)
Excellent point about the insurance rates not dropping as house values drop. This could explain why THERE ARE SO MANY MORE INSURANCE COMMERCIALS ON TELEVISION over the past year and a half than I can ever recall. Your undropped insurance premiums hard at work making new insurance commercials to keep or get your business.