The National Association of Mortgage Brokers (NAMB) yesterday filed a lawsuit against Federal Housing Finance Agency (FHFA) director James B. Lockhart over controversial appraisal changes.
The agreement eliminates mortgage broker-ordered appraisals, prohibits appraiser coercion, and reduces the use of in-house appraisals and captive appraisal management companies.
The NAMB lawsuit argues that mortgage and real estate professionals must maintain “an appropriate level of contact with appraisers to ensure appraisal quality and independence,” and claims the HVCC is simply a de facto regulation in violation of the Administrative Procedures Act of 1992.
“The HVCC does nothing but drive up costs for consumers and push small businesses out of the market,” said NAMB President, Marc Savitt. “The HVCC will drastically reduce the ability of mortgage brokers to provide consumers with an efficient and cost-effective means of obtaining a mortgage.”
“The lawsuit is the only remaining option to protect small businesses mortgage professionals from the severe competitive disadvantages caused by the agreement. The agreements will also have significant negative consequences for consumers.”
A survey conducted last year by Valufinders found that 91 percent of appraisers surveyed said they had been asked to inflate the value of the homes they appraise.
Another 81 percent worried they’d lose business if they failed to bring in the desired value.
Appraisal fraud has certainly been a substantial contributing factor to the huge mortgage crisis we’re in now.