I want to thank you for your kind invitation to the First
Annual Eastern Regional Conference for the American Guild of
Appraisers. Unfortunately, due to the senseless
tragedies that shook our nation this past week, I am unable to be
with you today. However, I wish to reassure you that the
Congress is united in spirit with every citizen of our
country. Our government is mobilized now to provide assistance
to the victims of the attack, to take protective security measures,
and to bring to justice those responsible for this
atrocity.
I want to begin by thanking the American Guild of
Appraisers, President William Sentner, the AFL-CIO and all of you
for all your hard work on behalf of the millions of homebuyers. All
across the nation, potential homebuyers and homeowners rely on you
to provide honest and accurate assessments of the value of
residential and commercial buildings. Your advice to consumers
can make or break a real estate deal. As appraisers, you help
reduce fraud, foreclosure risk, and the possibility that buyers will
get stuck with high mortgages for homes worth a lot
less.
You are professionals who play an integral role during the
complicated home buying process and in the lending market.
Based largely on your fair, accurate, and unbiased assessment,
homebuyers make decisions on the largest investment of their
lifetime. And as appraisers, you represent the last line of
defense between future homebuyers and the often unmanageable,
confusing and increasingly predatory real estate
market.
But your profession is facing a real threat. Some brokers
and lenders are finding ways to get around you and to pressure you
to provide inaccurate appraisals. No matter the condition of the
property or other factors, many lenders and brokers are expecting
you to meet a certain price. Otherwise, you, the appraiser,
will pay the price in the future. In other words, you will get
less business or you may even lose your business for wanting to do
the right thing.
For the past two years, I have been working to stop
predatory lending practices and pressures on independent appraisers.
My staff and I have been briefed about this situation by your
President Bill Sentner. I have heard numerous reports of
appraiser intimidation. Recently, I read that an
appraiser in Oklahoma lost business for refusing to “fudge” the
numbers. He appraised a home for $68,200, but the lender
wanted the buyer to pay $87,000. And the buyer, especially in
today’s tight housing market, was happy to pay that much. The
lender found another way to get the “right” appraisal and now, the
owner is stuck with a home that is worth less than the
mortgage.
That’s why I was very proud to introduce the Save our Homes
Act of 2001, H.R. 2531, a comprehensive initiative that will protect
homeowners and buyers from the growing predatory lending practices
in the mortgage industry, including the coercion of
appraisers. Those unsavory practices have led to a staggering
increase in home foreclosures in many parts of the
country.
I believe, like you do, that homebuyers need protections
from predatory lenders and brokers out to make a fast buck by
destroying the lives of families and stealing away the equity
they’ve built over the years in their homes. Predatory lenders are
thieves, preying on consumers who are house rich, but cash poor.
They don’t wear ski masks or hold a gun to your head. They
come knocking on your door with neckties and loan papers, charge you
credit card high interest rates, and steal the equity that you’ve
built in your home.
The Save our Homes Act would attack predatory practices in
the mortgage industry such as high interest rates, single premium
insurance products, loan flipping and churning, unilateral call
provisions, and loans made without regard to the borrower’s ability
to pay. The legislation would also give consumers the ability
to recover all interest, fees, and principal from lenders and
mortgage brokers.
And working with the American Guild of Appraisers and those
who believe that the work of an appraiser must truly remain
independent, I included a provision to ensure that appraisers are
free to give accurate appraisals and that they are free from
intimidation or coercion. Specifically, the provision
states:
No creditor or mortgage broker may compensate, directly or
indirectly, coerce, or intimidate an appraiser for the purpose of
influencing the independent judgment of the appraiser with respect
to the value of real estate that is to be covered by a conforming
home loan or is being offered as security according to an
application for a conforming home
loan.
Consumers have a right to know. They have a right to
know how much a property is really worth. They have a right to
be confident that your appraisal is true and unbiased, and they have
a right to feel safe when they sign on that dotted line. And
you have a right to carry out your job with honesty and integrity,
without pressure or harassment. Together we can help guarantee that
right by working side by side to drive predators out of business and
restore honesty to the
marketplace. |