National Mortgage Professional Magazine had an exclusive opportunity to follow up with National Association of Mortgage Brokers (NAMB) Immediate Past President Marc Savitt of The Mortgage Center in Martinsburg, W. Va. to discuss his trip to New York City and the offices of New York State Attorney General Andrew Cuomo. The purpose of the trip was to present the Office of the Attorney General with 120,000-plus signatures from consumers and the mortgage industry who agree that the Home Valuation Code of Conduct (HVCC) is harmful to the housing market and detrimental to the home buying process. Included among the signatures, which were hand-delivered by in 35 boxes by a group of mortgage professionals who made the trip from as far as Virginia, were letters and HVCC “horror stories” from consumers, appraisers, real estate agents and mortgage brokers.
You can listen to the entire audio interview conducted with NAMB Immediate Past President Marc Savitt regarding his meeting in New York City with senior attorney for New York State Attorney General Andrew Cuomo here.
“We have one state Attorney General who appears to be promulgating a rule or regulation across the entire country,” said Savitt.
Along for the ride with Savitt were Frank Garay and Brian Stevens, co-creators of Think Big Work Small. Both Frank and Brian have used their Web site, ThinkBigWorkSmall.com to discuss the HVCC and present the industry’s view on how it should be halted immediately through the duo’s daily video updates. Frank and Brian served as the key force behind soliciting the 120,000-plus signatures from both industry professionals and consumers.
Savitt’s day started at the Fox News studio for a live interview with the anchors of Fox Business News to discuss the harmful effects of the HVCC. Savitt described the people at Fox News as very helpful in wanting to get the message out on the negative impact of HVCC.
“The Attorney General’s Office is looking at a lot of opposition to this right now,” said Savitt. “They really don’t have a lot of friends out there, so it would be in their best interest to create some type of modification or revision to this Code so that everybody can live with it. The consumer will still be protected, but at the same time, it does not harm the consumer or small business.”
After the Fox interview, Savitt and the contingent of mortgage professionals ventured off to Broadway to hand-deliver the 35 boxes of letters and petitions to Cuomo’s office and the delivery was covered by another major media outlet, CNBC.
Savitt, along with Garay and Stevens, went up to the offices of the New York State Attorney General and had a meeting with two of Cuomo’s senior attorneys. The meeting was the fourth by Savitt with Cuomo’s office since May.
“This, by far, was the most productive meeting,” said Savitt. “The first two meetings, of course, we tried to get them not to implement the Code. I met with them last May after the Code was in effect for about three weeks. They weren’t interested in hearing anything and didn’t think there were going to be any problems with it.”
In addition to the petitions, Savitt also presented a study conducted by Interthinx which cited mortgage fraud in property valuation having increased 25 percent from the second quarter of 2009 to the third quarter of '09, an overall increase of 46 percent from the previous year. The third quarter of 2009 represented the first full quarter that the HVCC has been in effect.
“The Attorney General’s Office now acknowledges that there are problems with HVCC,” said Savitt. “They want to have dialogue with us to correct these problems. We told them that the only way to get rid of this list of problems is to have the brokers back in charge of the appraisal ordering process.”
The two sides agreed to meet again between Thanksgiving and the end of the year, and both sides will come to the table with options to get the HVCC issues resolved.
“To get a meeting like this, you usually send three or four e-mail requests that go ignored,” explained Savitt. “The Attorney General’s Office is deathly afraid of negative press, so the final e-mail I sent stated that we were going to the press with this issue and that they would be contacted for an interview. Within three minutes of sending that final e-mail, on a Saturday no less, I received correspondence from a senior attorney with the Attorney General’s Office granting the meeting we attended on Nov. 18th.”
In February of 2009, NAMB, with the support of Baker & Hostetler LLP, filed a lawsuit with the United States District Court for the District of Columbia against then Federal Housing Finance Agency (FHFA) Director James B. Lockhart over the HVCC included in the appraisal agreements between the FHFA, Fannie Mae and Freddie Mac (GSEs), and Attorney General Cuomo.
“They never followed the Administrative Procedure Act, which was the basis of our lawsuit against them,” said Savitt. “They never followed the proper procedures to determine if harm would be caused to small businesses, consumers and others. The problem they are having right now is to keep their Code in place, perhaps with some modifications and revisions so that everybody can live with this … the consumer will be protected and small businesses won’t be harmed.”
NAMB continues to update the mortgage broker community through its HVCC Resource Center section on their Web site, www.namb.org.
“One thing this issue has done is highlight the need for everybody to work together as a team,” noted Savitt. “That is the only way we will accomplish not only fixing HVCC, but maybe future issues that may come down the road. We are living in a world today where people can’t go at it alone … everybody has to work together for the common good of not only the industry, but the consumer. Hopefully, this is the beginning of that process and we won’t be dealing with this much longer.”