National Mortgage Professional Magazine recently had an opportunity to chat with David H. Stevens, Assistant Secretary for Housing at the U.S. Department of Housing & Urban Development (HUD), and 27th Commissioner of the Federal Housing Administration (FHA). A graduate of the University of Colorado, Boulder, Stevens has a strong background in housing, including experience in finance, construction, sales, mortgage acquisition and investment, and regulatory oversight.
Stevens is quoted in National Mortgage Professional Magazine: "I worked for Golden West from 1983 until about 1998. It was a very different program back then because when it started, the loan required a substantial downpayment and there was no secondary financing on those loans. The borrower typically came in with a 25 percent downpayment on those loans. You were dealing with a different sort of clientele. At the institution I worked at, Golden West, all the loans were held in portfolio, so the entire credit risk and interest rate spectrum was held on balance sheets."
"The scrutiny on qualification and scrutiny on property value was infamous at World Savings, where we personally appraised every single property.""As a manager at World Savings, we rented caravans and loaded them with underwriters and originators, and drove to the properties that had been appraised over the previous month with loan files in hand, to evaluate the quality of loans we were doing. That focus on credit quality that Herb and Marion Sandler instilled in that company over the years is why Golden West was such a darling of Wall Street for decades."
Erick C. Peck of the National Mortgage Professional Magazine asked of Stevens: "Concerning the new appraisal rules coming out of HUD, would you consider permitting a “blind ordering” so that any originator, no matter what channel of origination, can order the appraisal in an effort to accommodate the portability of an appraisal from lender to lender and save the consumer additional expenses?"
Stevens replied: "I do think the blind ordering of appraisals is the one thing that was the strongest piece of the Home Valuation Code of Conduct (HVCC) that everyone universally understands and agrees with … taking away the influence factor in the appraisal ordering is critical. We also believe that portability is important, so controlling the appraisal channel and having it directed is a concern to me because should that loan be turned down and the borrower wants to go somewhere else, do they need that appraisal at the next firm or do they need to pay a new appraisal fee?"
"It continues to be an expensive way to complete the transaction. However we get there, I think the idea you presented is the kind of concept that we continue to talk about … how to make the appraisal stay and take away that influence factor, keep it arms-length, but also not make this another setback to the consumer who needs that appraisal and may need an appraisal for a different institution."
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