“The American Dream is freedom; not a house”.
Had the best time talking #housing and #finance with Phil, Missy, and Kevin on Monday. Our discussion about zero interest policies were right on time; today is FED day and twitter buzzes with anticipation.
The Glass-Steagall Banking Act of 1933 comprised 37 pages and provided for a safer, more effective use of bank assets, it regulated interbank control, and prevented undue diversion of funds into speculative operations (gambling). In just 37 pages, Glass-Steagall ended Wall Street’s wild and speculative gambles that caused the Great Depression; it kept America’s economy growing for almost 70 years.
In 1994, interstate banking was allowed; in 1999, Glass-Steagall was repealed. It took banks less than five years to destroy America’s economy and put the world economy in a tail spin. Dodd-Frank is 829 pages and tried to address the same issues as Glass-Steagall but has failed to provide solutions; in fact, it’s done just the opposite. In 1933, Congress understood the business of banking and making sound loans to grow the U.S. economy.
An important industry detail was lost in translation when the Wall Street Journal reported on March 24th that Regulators Target Home Appraisals, @NAR’s @RealtorMag followed suit on March 26th with Regulator Seek to Raise Qualifications of Appraisers, and on April 4th @HousingWire failed to perform due diligence when reporting Fed Standards will Squeeze Small Appraisers.
The proposed rules presented by the National Credit Union Administration were signed by six federal agencies to establish minimum requirements for Appraisal Management Companies. The proposed rules serve a purpose to uphold Appraiser Independence Rules (AIR). They do NOT however affect appraiser qualifications or business practices in any way. Yet, when one reads any of these articles, it seems the real matters of fact are lost in translation.
Appraisers and AMCs are not one in the same. After all these years, it’s evident that industry observers and participants still aren’t able to distinguish the identifiable difference between Independent Appraisers and Appraisal Management Companies. Layering the two as one all-inclusive entity of the mortgage marketing process isn’t only misleading to consumers, it interferes with Appraiser Independence. AMCs of course benefit from industry related articles with undertones that imply only appraiser related components apply because it diverts attention to their unregulated participation in the mortgage process. So far, the media affords this misrepresentation far too often. The tactic of diverting the attention is noted throughout the last decade of misrepresentation and consumers deserve better than that.
The proposed rules are not an overhaul of the appraisal profession as appraisers have extensive rules in place that function perfectly. It’s the unregulated, third-party interference that’s diluted the performance of quality and therefore, the purpose of the newly proposed minimum for AMCs; including bank owned AMCs.
You may access The Joint Notice of Proposed AMC Rulemaking here: http://www.scribd.com/doc/214197518/Joint-Notice-Proposed-AMC-Rulemaking