Appraisal Mortgage Fraud
Appraisal Mortgage Fraud
The US Government Accountability Office (GAO) released their report on real estate appraisals “Appraisal Subcommittee Needs to Improve Monitoring Procedures” as required per Dodd-Frank. GAO was tasked with 1) determining how the Appraisal Subcommittee (ASC) is carrying out its Title XI responsibilities, 2) ASC’s plans to implement Dodd-Frank provisions, and 3) regulatory dollar thresholds for determining when an appraisal is required.
GAO reports that one of the challenges faced by ASC is in the area of resources and planning. GAO cites the creation of a national hotline as one example of a Dodd-Frank requirement that could strain the ASC’s resources. ASC has noted that the number of appraisers is trending downward, which will inevitably impact the agency’s $2.8 million budget. The report also discusses the $250,000 regulatory threshold. While some debate the need to change the threshold, GAO states that it has little impact on the proportion of mortgages with appraisals because the Federal Housing Administration and the government sponsored enterprises (GSE) make up most of the market and require appraisals regardless of price. However, this could change with a more privatized market.
Jerome Nagy, 202-383-1233
This week two federal online piracy bills garnered significant media attention when a number of popular websites went dark in opposition to the legislation. The bills, the Stop Online Piracy Act (SOPA) H.R. 3261 and the Protect IP Act (PIPA) S. 968 are intended to address the problem of foreign websites that facilitate the downloading of digital content like movies and music. Opponents fear that the legislation could be a threat to free speech and place an unreasonable burden on websites to police the links placed on their sites. In light of widespread internet protests this week, the bills sponsors in the House and Senate have delayed further consideration of their legislation until a consensus can be reached on how to move forward.
Real Estate professionals create valuable content/intellectual property that is increasing distributed on the internet. That content must be carefully protected from theft in a manner that does not create unintended consequences or undue compliance burdens.
NAR has taken no position on these bills at this time. We are carefully weighing the need to protect our members' intellectual property while avoiding potentially harmful unintended consequences.
We are working through our policy committee process to determine our position on this issue.
On Jan. 5, 2011, NAR reached out to Bank of America and Freddie Mac regarding inconsistencies in Bank of America’s implementation of required changes to Freddie Mac’s mandatory short sale affidavit. On Nov. 18, 2011, Freddie Mac amended its policy regarding the affidavits at the request of NAR and the American Land Title Association (ALTA). The changes included removing responsibility for the certification of any other signatory, and making all certifications based on "the best of each signatory's knowledge and belief." All servicers covered by the policy were required to implement the changes by Jan. 1, 2012, to comply with the revisions. Though Bank of America partially implemented the revisions, NAR is pushing for changes on several other provisions that are inconsistent with the revised policy. NAR is working closely with Freddie Mac to ensure proper implementation by all servicers, and will continue to post the latest updates on nar.realtor.
NAR members are encouraged to make sure they are signing an updated form and, if presented with an old form, should request the servicer to update or allow amendments to the form before they sign, to avoid potential liability issues.