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FHFA Rereleases Proposed Capital Rule for Fannie, Freddie

The Federal Housing Finance Agency (FHFA) announced that it is seeking comments on a notice of proposed rulemaking that establishes a new regulatory capital framework for Fannie Mae and Freddie Mac (the Enterprises). The proposed rule is a re-proposal of the notice of proposed rulemaking published in July 2018. Comments will be due 60 days after the notice is published in the Federal Register. 

The 2018 proposal remains the foundation of the re-proposal. The enhancements in the new proposal preserve the mortgage risk-sensitive framework of the 2018 proposal, while increasing the quantity and quality of the Enterprises' regulatory capital and reducing the pro-cyclicality of the aggregate capital requirements. Together, the enhancements in the re-proposal ensure each Enterprise's safety and soundness and its ability to fulfill its statutory mission across the economic cycle, in particular during periods of financial stress. The re-proposal is also a critical step toward responsibly ending the conservatorships.

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ECOA Valuations Rule Updated to Address Coronavirus

Creditors have flexibility regarding when they must provide appraisals to mortgage applicants, according to an updated Q&A on the Equal Credit Opportunity Act Valuations Rule released April 29 by the Consumer Financial Protection Bureau. Under ordinary circumstance, creditors are required to provide appraisals promptly upon completion or three business days prior to consummation of a transaction.

Read the Rule Here

NC Auditor’s Report on NCDOT

Click here to view the audit report prepared by the NC State Auditor of NCDOT.

CFPB Wants to Cut Debt-to-income Requirement from QM Rule

By Ben Lane

Over the last several months, a number of the nation’s largest lenders and housing trade groups have called on the Consumer Financial Protection Bureau to make changes to the Ability to Repay/Qualified Mortgage rule.

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FHFA Issues Request for Input on Fannie Mae and Freddie Mac UMBS Pooling Practices

The Federal Housing Finance Agency (FHFA) today issued a Request for Input (RFI) about Fannie Mae’s and Freddie Mac’s (the Enterprises’) pooling practices for the formation of “To-Be-Announced” (TBA)-eligible Uniform Mortgage-Backed Securities (UMBS).  FHFA is also seeking public input about other policies and practices that might affect UMBS fungibility, including the Enterprises’ oversight of UMBS prepayment speeds and alignment.

This RFI follows on the successful launch of UMBS and seeks to ensure that UMBS remain a source of stable, affordable liquidity for the U.S. housing finance system.  The requested input will help FHFA determine whether further action or alignment is necessary to ensure reasonably consistent security cash flows and continued fungibility of the Enterprises’ UMBS.

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Banking Committee Leaders Seek Answers on Appraisal Waiver

Rep. Maxine Waters, D-Calif., and Sen. Sherrod Brown, D-Ohio, on Sept. 24 submitted a letter to the Appraisal Subcommittee seeking answers about its July decision to grant a waiver of appraiser certification and licensing to the state of North Dakota. The letter expressed “surprise and concern” about the “unprecedented” waiver.

Waters chairs the House Financial Services Committee and Brown is ranking member of the Senate Banking, Housing and Urban Affairs Committee.

“It is so concerning that the ASC, the primary federal organization with oversight over appraisal and appraiser standards, has acted to waive appraiser certification requirements with minimal justification,” the letter stated, noting that appraisals are essential to safety and soundness and consumer protection. The letter explains that the move is unprecedented because the ASC has not granted any waivers since the Federal Financial Institutions Examination Council first fully implemented appraisal rules. In granting this one, the ASC ignored the objections of the North Dakota Real Estate Commission.

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HUD Indefinitely Suspends Rule Change to FHA Down Payment Assistance Guidelines

By Jessica Guerin

The Department of Housing and Urban Development issued a notice to lenders announcing the formal suspension of its rule change to down payment assistance guidelines.

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ASB Mulls Evaluations Standards; Paper Expected Soon

The Appraisal Standards Board of The Appraisal Foundation on Aug. 1 announced its intention to explore the creation of uniform standards for evaluations. The ASB said that since no standards exist for conducting evaluations, there is greater risk to the safety and soundness of real estate transactions and diminished protections for consumers. A concept paper is expected near Labor Day. 

Read more here.

Court Grants Stay of Motion in FTC Case Against LREAB

A Louisiana court on July 29 granted a motion to stay in the Federal Trade Commission's case against the Louisiana Real Estate Appraisers Board in which it alleged the LREAB illegally determined a floor for appraiser prices. The court ruled that, among other things, continuing the case would hamper the state's ability to make and enforce policies.

Read more here.

Appraisal Institute Board of Directors Approves 2020 Budget at Q3 Meeting in Denver

The Appraisal Institute Board of Directors at its July 25-26 meeting in Denver approved the organization’s 2020 budget and directed to 45-Day Notice proposed amendments to Regulations No. 7 and 8 regarding creation of state Government Relations Subcommittees under the current national Government Relations Committee.
 
In other business, the Board of Directors:
  • Approved the creation of a Women’s Initiative Committee.
  • Revised the organization’s policies for AI education instructors regarding waivers, conduct and evaluations;
  • Amended AI’s Statement of Investment Policy; and
  • Adopted the dues and fees schedule for 2020:
    • Deadline on dues/fees invoice payment: Jan. 1
    • Late fees assessed at 15%: April 1
    • Suspensions issued: June 1
    • Terminations issued: Sept. 1.
The Board also elected to two-year terms beginning Jan. 1:
  • Matthew S. Myers, MAI, of Leeds, England, as the international member on the AI Board of Directors;
  • Scott Robinson, MAI, SRA, AI-RRS, AI-GRS, as chair of the Strategic Planning Committee;
  • Claire M. Aufrance, MAI, SRA, to the Strategic Planning Committee; and
  • Michael J. Mignona, MAI, AI-GRS, and Craig Steinley, SRA, AI-RRS, to the Audit Committee.
Additionally, the Board elected Peter A. Vimini, MAI, to the Professional Liability Insurance Program Committee for a three-year term. He also was elected to fill a vacancy on PLIPC for a term ending Dec. 31.  
 
The Board’s next meeting is scheduled for Nov. 14-15 in Chicago.

Federal Agencies Exempt Community Banks From Volcker Rule

Five federal financial regulatory agencies announced on Tuesday that they adopted a final rule to exclude community banks from the Volcker Rule, consistent with the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The Volcker Rule generally restricts banking entities from engaging in proprietary trading and from owning, sponsoring, or having certain relationships with hedge funds or private equity funds. Under the final rule, which is unchanged from the proposal, community banks with $10 billion or less in total consolidated assets and total trading assets and liabilities of 5 percent or less of total consolidated assets are excluded from the Volcker Rule.

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ASC OKs North Dakota Request for Temporary Appraisal Waiver

The Appraisal Subcommittee on July 9 granted a request from North Dakota for a temporary waiver from appraisal licensing requirements after state officials claimed a scarcity of appraisers. The ASC granted the one-year waiver from licensing requirements by a 5-2 vote; an additional year is possible if state officials again seek a waiver based on the scarcity argument.

The Federal Financial Institutions Examination Council still needs to approve the decision, which is expected to happen at its meeting later this month. It’s important to note that the temporary waiver is not a waiver from appraisals, but from appraisal licensing requirements. All appraisals still need to comply with the Uniform Standards of Professional Appraisal Practice.

The waiver will cover both residential and commercial appraisals; however, the residential waiver could be sunset 60 days after banking regulators raise the appraisal threshold, if they choose to do so. A decision by the regulators on the threshold could come as soon as this month.

During the ASC’s special meeting, North Dakota Appraisal Board Chair Corey Kost, MAI, argued against granting the temporary waiver, citing no evidence of a scarcity of appraisers. He also argued that Congress has already addressed this issue with the rural appraisal waiver granted in the regulatory relief bill signed by President Trump last year.

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Appraisal Institute Urges Congress to Address Valuation Issues

The president of the Appraisal Institute, the nation’s largest professional association of real estate appraisers, encouraged Congress to act on valuation topics during today’s hearing on Capitol Hill.

Stephen S. Wagner, MAI, SRA, AI-GRS, told the House Financial Services Committee’s Housing, Community Development and Insurance Subcommittee that the Appraisal Institute supports passage of H.R. 2852, which would allow licensed appraisers to perform appraisals for Federal Housing Administration loans.

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FHFA Director to Congress: End Fannie, Freddie Conservatorship

By Austin Weinstein

Fannie Mae and Freddie Mac’s chief regulator is calling on Congress to pass housing-finance reform legislation that sets a path to return the companies to private hands.

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Appraisal Institute Urges Congress to Address Valuation Issues

The president of the Appraisal Institute, the nation’s largest professional association of real estate appraisers, encouraged Congress to act on valuation topics during yesterday’s hearing on Capitol Hill.

Stephen S. Wagner, MAI, SRA, AI-GRS, told the House Financial Services Committee’s Housing, Community Development and Insurance Subcommittee that the Appraisal Institute supports passage of H.R. 2852, which would allow licensed appraisers to perform appraisals for Federal Housing Administration loans.

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2nd Quarter 2019 Washington Report & State News

Appraisal Institute Among Organizations Opposing Residential Threshold Increase

The Appraisal Institute on Feb. 4 was one of six organizations signing a comment letter that "strongly opposed" a proposal from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to raise the residential appraisal threshold from $250,000 to $400,000. 

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NC Appraisal Board Suspends CoesterVMS

On Monday, February 26, 2019, the North Carolina Appraisal Board voted to summarily suspend the registration of CoesterVMS. Coester has failed to respond to seven complaints filed against it and has failed to maintain a surety bond after its surety bond was cancelled. Effective March 1, 2019, Coester’s registration is suspended and they shall cease all activities which constitute appraisal management services in North Carolina. The suspension shall remain in effect until the Board issues a Final Decision in this matter or until the parties enter into a Consent Order that is a final determination in this matter.

Appeals court sides with Zillow in lawsuit over Zestimate accuracy

By Nat Levy

A federal appeals court sided with Zillow in a long-running lawsuit over the accuracy and marketing of the real estate giant’s controversial Zestimate tool.

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CFPB Releases List of Rural and Underserved Counties

The Consumer Financial Protection Bureau on Feb. 12 released its 2019 list of rural and underserved counties, which those entities can use to determine if they are exempt from certain appraisal and ability-to-pay rules.

Click here to view the list.

AI Among Groups Opposing Federal Banking Agencies' Action

The Appraisal Institute on Feb. 4 was one of six organizations signing a comment letter that “strongly opposed” a proposal from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to raise the residential appraisal threshold from $250,000 to $400,000. 
 
If the proposal is approved, nearly three quarters of residential real estate loans held in portfolio by depository institutions would be exempt from appraisal requirements. A high percentage of those loans are from rural areas.
 
The same proposal was evaluated and answered in 2017 as part of the process of the federally mandated Economic Growth and Regulatory Paperwork Reduction Act — a regulatory relief effort that encompassed four different notice and comment periods and six public hearings. At that time, the same agencies that are now proposing the increase said it “would not be appropriate” to increase the residential threshold considering safety and soundness and consumer protection concerns.
 
The “about face” is an apparent attempt by the agencies to pacify rural community banks that received discrete relief from Congress through EGRPRA. The valuation organizations that signed the comment letter have also requested a hearing on the proposal, but the agencies continue to deliberate on the issue.
 
In addition to the Appraisal Institute, the comment letter was signed by: 
  • American Guild of Appraisers, OPEIU, AFL-CIO;
  • American Society of Appraisers;
  • American Society of Farm Managers and Rural Appraisers;
  • MBREA | The Association for Valuation Professionals; and
  • RICS.
Read the comment letter.