NAMB meets with staff from Attorney General Coumo's office
OCC challenges proposed FNMA, FHLMC and OFHEO appraisal agreement with NY Attorney GeneralMortgagePress.comOCC, Fannie MAe, Freddie Mac, appraisal agreement, Andrew Cuomo, OFHEO On May 27, the Office of the Comptroller of Currency (OCC) submitted a formal letter addressing the proposed agreement among Fannie Mae, Freddie Mac and Office of Federal Housing Enterprise Oversight (OFHEO) and New York Attorney General Andrew Cuomo to establish the Home Valuation Code of Conduct (Code), a code for real estate appraisal practices. On March 3, 2008, the NY AG announced settlement agreements with Fannie Mae, Freddie Mac, and OFHEO, the office within the Department of Housing and Urban Development that oversees Fannie Mae and Freddie Mac. Pursuant to the agreements, beginning on January 1, 2009, Fannie Mae and Freddie Mac would no longer purchase single-family mortgage loans, other than government-insured loans, from mortgage originators that do not agree to adopt the Code with respect to such loans. The Code provides for various restrictions, prohibitions, and requirements regarding appraisal reports used to secure mortgage loans. The OCC joins the Federal Trade Commission (FTC), Office of Thrift Supervision (OTS) and various trade groups in (i) raising concerns over the potential effect of the proposed Code on the mortgage industry and consumers, and (ii) urging the withdrawal of the Code. (the FTC and OTS letters were reported in InfoBytes, May 9, 2008). The OCC's letter highlights likely adverse consequences that may result from the Code, which include, among others, unnecessarily raising mortgage origination costs, disrupting the mortgage appraisal process and undermining rather than enhancing the quality of appraisals. In addition, the OCC contends that the Code and underlying Home Valuation Protection Program and Cooperation Agreements: (i) constitute a de facto rule adopted in violation of the Administrative Procedures Act (APA); (ii) exceed the scope of OFHEO's authority; (iii) violate federal law by setting requirements or restrictions on the real estate lending operations of national banks; and (iv) ignore that federal standards for real estate appraisals should be set by Congress, not through private litigation. For a copy of the OCC letter, click here.