Comptroller Dugan provides the OCC's views on the agreement between the Office of Federal Housing Enterprise Oversight, the New York Attorney General, Fannie Mae, and Freddie Mac. Download OVV_HVCC_letter_20080527.pdf
The letter, dated May 27, 2008, characterizes the Home Valuation Code of Conduct (or HVCC) as having “adverse consequences … for the safe, sound, and efficient operation of national banks’ residential mortgage lending activities, as well as for the cost of mortgage credit to consumers.”
“The OCC endorses the principle that real estate appraisals must be conducted free from influence or coercion by any party,” Dugan writes in the letter. “But this objective should be achieved directly … not by dictating the corporate and internal organizational structures of lenders.”
Source: HousingWire.com
The OCC says, “The Agreements and Code are, in practical effect, regulation of the corporate and internal operations of residential real estate lenders on a nationwide scale, accomplished through restrictions on eligibility of loans sold to Fannie Mae and Freddie Mac that are based largely on the organizational structures used by lenders to obtain appraisals for such codes.”
The OCC believes the Code would unnecessarily raise administrative expenses—a cost that would later be passed onto consumers. The OCC added, “Third, we have significant concerns that compliance with the Code will disrupt mortgage appraisal processes that generally are functioning well for depository institutions and consumers.”
Additional References:
- Bloomberg.com - Fannie, Freddie Appraisal Agreement May Violate Law (Update2)
- Reuters - UPDATE 1-US big bank regulator wants appraisal deal withdrawn
- Wall Street Journal - Regulator Faults Appraisal Plan
- Business Week - Regulator protests Fannie, Freddie appraisal deal
Author: Brian J. Davis, RAA - Brian Davis & Associates - Brian has over 23 years of appraisal experience in Central, IL and hosts the Appraisal Scoop blog, the WinTOTAL Users Group and the ScoopGear marketplace.
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