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New Consumer Protection Bill Would Reinstate Practices that Led to Housing Bubble: Appraisal Management Group
January 25, 2010The Title/Appraisal Vendor Management Association (TAVMA) today announced its opposition to federal and state legislation that would dismantle new federal safeguards designed to protect appraiser independence and provide unbiased appraisals to homebuyers and lenders. Proposed legislation (H.R.1728) on the federal level and numerous initiatives on the state level would once again permit discredited business practices that were key factors behind the real estate bubble and crash. Specifically, they would allow mortgage brokers to select handpicked appraisers and communicate with them regarding property values. In May 2009, Fannie Mae and Freddie Mac banned this practice and the Federal Housing Administration (FHA) is expected to enact a similar rule next month. H.R. 1728 would in effect repeal that new Home Value Code of Conduct (HVCC), initiated by Fannie Mae and Freddie Mac to prevent appraiser pressure and inflated appraisals, even though both agencies are on record as saying that the new code has improved appraisal quality. Full release.