Apr 18 2009
When big banks fail, mortgage brokers get punished?
Want to know how large banks get punished for their wrong-doing in the mortgage loan arena? They don’t. What happens is new mortgage related laws are created to punish mortgage brokers; not the banks! Take for example the investigation results from November of 2007.
After learning several emails evidenced appraisers were being pressured by a bank to inflate their appraised values on homes; New York Attorney General Andrew Cuomo arranged an agreement between Fannie Mae, Freddie Mac and OFHEO (Office of Federal Housing Enterprise Oversight); called the Home Valuation Code of Conduct or the HVCC. In fact, these specific appraisal firms were not only pressured but knew what they were doing and merely wanted to secure future business with the largest savings and loan bank (at the time) in history. The HVCC’s purpose was to reduce apparent bank-appraisal fraud and reduce undue pressures that this particular bank put on it’s appraisers.
But this new HVCC agreement affects only mortgage brokers, not banks! No longer is a mortgage broker allowed to speak with appraisers let alone order them when working with conventional Fannie Mae and Freddie mac type mortgage loans. Thanks; makes perfect sense…
A bank committed the crime and laws were created to tie the hands of professional mortgage brokers?
Going forward, we Florida mortgage professionals will have begin to process our client files and allow the Lender to order the appraisal. Banks will still get to order their client appraisals. My thoughts are clear on what our future holds for us Florida mortgage professionals… Bring it on…
By the way, that bank eventually went out of business and was purchased by yet another big bank.
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