NAIHP has filed a formal complaint with the Inspector General’s Office, alleging Fannie/Freddie and their regulator agreed to the terms of the Home Valuation Code of Conduct (HVCC) as part of a plea bargain like agreement to avoid further investigation by the New York Attorney General’s Office.
In December of 2008,Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (FHFA), agreed to the final version of HVCC on the condition then New York Attorney General Andrew Cuomo, drop the GSE’s from his valuation fraud investigation.
“In May of 2008, I met with Fannie Mae General Counsel Beth Wilkinson. During our meeting, I asked the G.C. why Fannie signed on to the HVCC agreement.” Her exact words were, “Cuomo has his foot in our throats.” Amongst other evidence, this supports our allegation that the GSE’s only signed the agreement to escape further investigation by Cuomo,” said NAIHP President Marc Savitt.
NAIHP is vigorously pursuing copies of the tens of thousands of public comment letters received by the GSE’s and the FHFA, with respect to the HVCC. NAIHP has made numerous requests for these letters, all of which have been denied. A formal request through the Freedom of Information Act (FOIA) is being prepared.
In a May 19, 2010 letter to Andrew Cuomo, FHFA Acting Director Edward DeMarco stated, “The Home Valuation Code of Conduct deployed by Fannie Mae and Freddie Mac was implemented after taking extensive market place comments.” “Refusing to release the comment letters after admitting they relied upon them when implementing the HVCC suggests the letters fail to support the code’s implementation and the FHFA is deliberately withholding this information from the public and Congress,” said Savitt.
Since HVCC was implemented on May 1, 2009, valuation fraud has risen by over 50%, appraisal quality has decreased substantially, thousands of appraisal professionals have been forced out of business and home values have continued to decline. Additionally, new appraisal rules have created a sharp increase in settlement costs for consumers.
Although, the HVCC agreement expired late last year, it’s been replaced by similar language in the Dodd-Frank Act and GSE guidelines.
NAIHP will continue to work with Congress and the CFPB on this important issue.