I just read this here.
It would great if there was a way to get mortgage insurance for condos and coops with 10% or less down.
Friday, October 02, 2009
Thursday, August 20, 2009
Take the Good with the Bad
FHA Mortgagee Letter 2009-19 dated June 12, 2009 has a few good things in it, and a few bad things. I'm not sure if overall it's good for the high rise condo market.
First, I'll mention the good stuff. First off, Right of first refusal is permitted unless it violates discriminatory conduct under the Fair Housing Act regulation in 24 CFR 100. That is a major plus for the New York City market where all condos have the Right of First Refusal in the By-Laws. In fact, this has been one of the main reason there are so few NYC condos that are FHA approved. If this goes into effect, there will be an onslaught of condos that are approved.
Next there has been a change in ground up new construction condo approval, in cases where a building permit and a certificate of occupancy (or its equivalent) are issued by a local jurisdiction that performs a minimum of three inspections (typically the footing, framing and final) neither an Early Start Letter nor a HUD approved ten-year warranty plan is required. For those jurisdictions that do not issue a building permit (or its equivalent) prior to construction and a Certificate of Occupancy (or its equivalent) upon completion of construction, a condominium unit that is one year old or less must have either an Early Start Letter (with a minimum of three inspections by an FHA Roster Inspector) or be covered by a HUD-approved ten-year warranty plan (with a final inspection by a FHA Roster Inspector) to be eligible for high-ratio mortgage insurance.
All condominium types are eligible to follow this process (e.g. Multi-family). Projects are still required to be on the FHA-approved condominium list.
This may mean that New York City condos may be approved for the full boat of FHA financing. Any condos in the NYC market that have been applying for FHA approval have been requesting approval for 90% maximum financing due to the expense of the 10 year warranty on all of the units in the building required to go to 96.5% financing. When there are 200 units that warranty can get expensive.
And now for the bad. I'll start off easy with FHA will not accept a temporary Certificate of Occupancy; all units within the building
(where the specific unit that is security for the insured financing is located) must be complete. Developers usually want to start closing as soon as the Temporary Certificate of Occupancy (TCO) is issued. There is usually a significant delay between the TCO and the Certificate of Occupancy that could stretch longer than it should. Remember these are controlled by bureaucracies.
And here's the rub: Transfer of control of the Homeowners Association shall pass to the owners of units within the project no later than the earlier of the following:
1. 120 days after the date by which 75 percent of the units have been conveyed to the unit purchasers, or
2. One year after completion of the project evidence by the first conveyance to a unit purchaser. This means that the entire building needs to sell 51% and be turned over the Homeowners Association (HOA) within 1 year of the first sale. No pre-construction sales for buildings wanted to be FHA approved and with the current market sales velocity, it's hard to say whether a 300 unit condo tower is going to sell enough units in 12 months. This seems to be a deal killer and the builder's associations are fighting the whole mortgagee letter based on it.
It's too bad that we got the acceptance of the Right of First Refusal with this at the same time. We almost had something that saved the NYC condo market.
First, I'll mention the good stuff. First off, Right of first refusal is permitted unless it violates discriminatory conduct under the Fair Housing Act regulation in 24 CFR 100. That is a major plus for the New York City market where all condos have the Right of First Refusal in the By-Laws. In fact, this has been one of the main reason there are so few NYC condos that are FHA approved. If this goes into effect, there will be an onslaught of condos that are approved.
Next there has been a change in ground up new construction condo approval, in cases where a building permit and a certificate of occupancy (or its equivalent) are issued by a local jurisdiction that performs a minimum of three inspections (typically the footing, framing and final) neither an Early Start Letter nor a HUD approved ten-year warranty plan is required. For those jurisdictions that do not issue a building permit (or its equivalent) prior to construction and a Certificate of Occupancy (or its equivalent) upon completion of construction, a condominium unit that is one year old or less must have either an Early Start Letter (with a minimum of three inspections by an FHA Roster Inspector) or be covered by a HUD-approved ten-year warranty plan (with a final inspection by a FHA Roster Inspector) to be eligible for high-ratio mortgage insurance.
All condominium types are eligible to follow this process (e.g. Multi-family). Projects are still required to be on the FHA-approved condominium list.
This may mean that New York City condos may be approved for the full boat of FHA financing. Any condos in the NYC market that have been applying for FHA approval have been requesting approval for 90% maximum financing due to the expense of the 10 year warranty on all of the units in the building required to go to 96.5% financing. When there are 200 units that warranty can get expensive.
And now for the bad. I'll start off easy with FHA will not accept a temporary Certificate of Occupancy; all units within the building
(where the specific unit that is security for the insured financing is located) must be complete. Developers usually want to start closing as soon as the Temporary Certificate of Occupancy (TCO) is issued. There is usually a significant delay between the TCO and the Certificate of Occupancy that could stretch longer than it should. Remember these are controlled by bureaucracies.
And here's the rub: Transfer of control of the Homeowners Association shall pass to the owners of units within the project no later than the earlier of the following:
1. 120 days after the date by which 75 percent of the units have been conveyed to the unit purchasers, or
2. One year after completion of the project evidence by the first conveyance to a unit purchaser. This means that the entire building needs to sell 51% and be turned over the Homeowners Association (HOA) within 1 year of the first sale. No pre-construction sales for buildings wanted to be FHA approved and with the current market sales velocity, it's hard to say whether a 300 unit condo tower is going to sell enough units in 12 months. This seems to be a deal killer and the builder's associations are fighting the whole mortgagee letter based on it.
It's too bad that we got the acceptance of the Right of First Refusal with this at the same time. We almost had something that saved the NYC condo market.
Sunday, July 19, 2009
The media is myopic
I'm watching CNN this Sunday morning, and they've elected to continue their extensive coverage of one of their own's death. Walter Cronkite died the other day, a sad event much as anyone dying is. But a historic event? I think not. The man was a news reporter, perhaps even a good one, though I wouldn't really know being too young to truly remember his reporting style. I've seen less coverage of a statesman dying, or of the thousands that are unjustly dying throughout the world right this very minute. Is CNN covering this? Of course not. They cannot see past their own noses, they think they are newsworthy. I thought the whole point of the reporter was to observe and report. Since when did they become the news? If Mr. Cronkite was the reporter and newsman they are saying he was, would he be embarassed right now?
Friday, July 17, 2009
It's really this bad...
I know the Loan Officers out there may have horror stories of their own, but I need to purge. It seems like between the new regulatory microscope, the everchanging financial picture of the mortgage insurance companies, the constant unsurety of condo and coop building approval guidelines, and the unwillingness to pay for good underwriting staff, it's a miracle that loans actually close.
In New York, where an attorney is required to close on behalf of the bank, you can add to the list bank attorney staff members who think it's OK to treat the borrowers who actually pay their fee rudely.
Here's my day.
Today an underwriter on one of my files decided to call my borrower on a coop refinance and berate him about the way that he prepares his tax returns. The underwriter has a high school education, and my borrower is a corporate tax attorney with 10 years of experience. Net result: I had both of them screaming at me about the other with my manager included. Great.
Our coop approval department, yesterday, asks for the sponsor's cashflow statement if the last amendment to the Coop Offering Plan is over 12 months old. Today he says that he needs both the sponsor's cashflow statement the last amendment dated August of 1999. I'm just trying to get the building approved before the mortgage contingency expires so the borrower doesn't lose his $73,000 contractual deposit if he cannot close his loan. Guess who's yelling at me now: the coop approval guy apparently because he doesn't know his job, the buyer's attorney, the broker, the managing agent of the building and the borrower. Even better.
I finally (who knows how in this environment) get a file to the underwriter to clear to close. She doesn't understand how our condo approval database is set up, or she cannot read, I'm not sure which. So she continually requests condo approval. I don't know this at first, so I keep sending her the condo approval screenshot from the database, which she doesn't know what it says, so she asks for condo approval, and a round and round we go. Meanwhile, it's a Friday, and 4 days before the buyer is contractually obligated to close or forfeit his down payment of $46,000. And who's yelling at me? You got it: the borrower, the underwriter, her manager, my manager, the broker and both attorneys. Yay!
I have one of those Fannie / Freddie prime loan modifications that the Obama adminstriation said was going to help the homeowners. All conditions were submitted with the file. Well, there isn't much to submit other than an application and title. But wait for it...I need a subordination from another major bank. After 2 months and many fruitless faxes, I finally receive the subordination. Now this is a rubber stamp approval and we close, right? Right? Wrong. We are into our second rate lock extension (borrower paid I might add) and I still cannot get the underwriter to approve this file to close. If I ask, I get laughed at, like I'm some kind of idiot to even ask that a refinance that will save our customer hundreds of dollars each month get closed.
This was all before 12pm today, when I couldn't take it anymore and left the office. No, the mortgage industry isn't broken, no way.
Fact is, I could go on and on about issues like these, condo approval wants an appraisal to be amended prior to condo approval, the appraiser (after I go through all the hoops of getting the operations staff to actually submit the request, I've so painstakingly prepared for them in a manner that allows them to quickly review, and push "send" - that's 3 days right there folks) says that the 'as of ' date won't be effective if that is done and thus won't amend the appraisal. Now I'm not taking about a valuation change, nor am I talking about changing anything that isn't on the questionnaire that was completed by the managing agent, reviewed by the developer, signed off on by the developer's attorney and approved by our condo approval department. It's actually not even a change, it's requesting that a box that had "unkn" which is possibly short for "unknown" be marked with the actual data for the purposes of condo project approval. Now if as a commissioned loan originator I'm so bad, fraudulent, and unscrupulous that I cannot be trusted to send a fax to an appraiser (according to HVCC) then why is everyone running this stuff through me? Why doesn't condo project approval reach out the appraiser themselves and request the change. And when the appraiser says "no", make a business decision about what they are going to do. Leave the buyer hanging and add to the housing woes, or go with the questionnaire information and approve the building so that people who want to can buy an apartment and grease the wheels of our sputtering economy.
Bottom line, the loan is going nowhere fast. It doesn't matter where I work because I know people at all major banking institutions who have much, much worse stories to tell. They cannot even pick up their phones anymore. They have run out of excuses, gone past sounding like moron, and are now just weeping...
Oh, and let me end with this one last potshot at the Real Estate Brokers out there. I have a deal that was approved today. I've had the conversation with the broker several times in which I assure him that I'm only paid if the loan closes, I don't get a salary, I'm only paid a commission on closed loans. So today, I say the underwriter told me that it would be approved late yesterday or first thing today. That's literally what the underwriter told me around noon yesterday. Today at around noon, no approval. The broker has the gumption to ask me to ask the underwriter when the approval will be done as if I hadn't spent the morning begging in such a manner as to bring everlasting shame upon my house and family. Is he kidding me?
Man, some people really don't spend much time listening do they? I've told him at least 3 times I don't get a salary and that I'm only paid if the loan closes, what makes him think that I didn't ask the underwriter a thousand times by 9am that morning? He just pressures people because he has no other value to add. People who are good at their jobs are being hammered into bits by the mediocrity of the lending world, there are excellent attorneys, brokers, loan officers, underwriters, closers, buyers, sellers, builders and everyone else out there. At what point do we get to do our jobs?
In New York, where an attorney is required to close on behalf of the bank, you can add to the list bank attorney staff members who think it's OK to treat the borrowers who actually pay their fee rudely.
Here's my day.
Today an underwriter on one of my files decided to call my borrower on a coop refinance and berate him about the way that he prepares his tax returns. The underwriter has a high school education, and my borrower is a corporate tax attorney with 10 years of experience. Net result: I had both of them screaming at me about the other with my manager included. Great.
Our coop approval department, yesterday, asks for the sponsor's cashflow statement if the last amendment to the Coop Offering Plan is over 12 months old. Today he says that he needs both the sponsor's cashflow statement the last amendment dated August of 1999. I'm just trying to get the building approved before the mortgage contingency expires so the borrower doesn't lose his $73,000 contractual deposit if he cannot close his loan. Guess who's yelling at me now: the coop approval guy apparently because he doesn't know his job, the buyer's attorney, the broker, the managing agent of the building and the borrower. Even better.
I finally (who knows how in this environment) get a file to the underwriter to clear to close. She doesn't understand how our condo approval database is set up, or she cannot read, I'm not sure which. So she continually requests condo approval. I don't know this at first, so I keep sending her the condo approval screenshot from the database, which she doesn't know what it says, so she asks for condo approval, and a round and round we go. Meanwhile, it's a Friday, and 4 days before the buyer is contractually obligated to close or forfeit his down payment of $46,000. And who's yelling at me? You got it: the borrower, the underwriter, her manager, my manager, the broker and both attorneys. Yay!
I have one of those Fannie / Freddie prime loan modifications that the Obama adminstriation said was going to help the homeowners. All conditions were submitted with the file. Well, there isn't much to submit other than an application and title. But wait for it...I need a subordination from another major bank. After 2 months and many fruitless faxes, I finally receive the subordination. Now this is a rubber stamp approval and we close, right? Right? Wrong. We are into our second rate lock extension (borrower paid I might add) and I still cannot get the underwriter to approve this file to close. If I ask, I get laughed at, like I'm some kind of idiot to even ask that a refinance that will save our customer hundreds of dollars each month get closed.
This was all before 12pm today, when I couldn't take it anymore and left the office. No, the mortgage industry isn't broken, no way.
Fact is, I could go on and on about issues like these, condo approval wants an appraisal to be amended prior to condo approval, the appraiser (after I go through all the hoops of getting the operations staff to actually submit the request, I've so painstakingly prepared for them in a manner that allows them to quickly review, and push "send" - that's 3 days right there folks) says that the 'as of ' date won't be effective if that is done and thus won't amend the appraisal. Now I'm not taking about a valuation change, nor am I talking about changing anything that isn't on the questionnaire that was completed by the managing agent, reviewed by the developer, signed off on by the developer's attorney and approved by our condo approval department. It's actually not even a change, it's requesting that a box that had "unkn" which is possibly short for "unknown" be marked with the actual data for the purposes of condo project approval. Now if as a commissioned loan originator I'm so bad, fraudulent, and unscrupulous that I cannot be trusted to send a fax to an appraiser (according to HVCC) then why is everyone running this stuff through me? Why doesn't condo project approval reach out the appraiser themselves and request the change. And when the appraiser says "no", make a business decision about what they are going to do. Leave the buyer hanging and add to the housing woes, or go with the questionnaire information and approve the building so that people who want to can buy an apartment and grease the wheels of our sputtering economy.
Bottom line, the loan is going nowhere fast. It doesn't matter where I work because I know people at all major banking institutions who have much, much worse stories to tell. They cannot even pick up their phones anymore. They have run out of excuses, gone past sounding like moron, and are now just weeping...
Oh, and let me end with this one last potshot at the Real Estate Brokers out there. I have a deal that was approved today. I've had the conversation with the broker several times in which I assure him that I'm only paid if the loan closes, I don't get a salary, I'm only paid a commission on closed loans. So today, I say the underwriter told me that it would be approved late yesterday or first thing today. That's literally what the underwriter told me around noon yesterday. Today at around noon, no approval. The broker has the gumption to ask me to ask the underwriter when the approval will be done as if I hadn't spent the morning begging in such a manner as to bring everlasting shame upon my house and family. Is he kidding me?
Man, some people really don't spend much time listening do they? I've told him at least 3 times I don't get a salary and that I'm only paid if the loan closes, what makes him think that I didn't ask the underwriter a thousand times by 9am that morning? He just pressures people because he has no other value to add. People who are good at their jobs are being hammered into bits by the mediocrity of the lending world, there are excellent attorneys, brokers, loan officers, underwriters, closers, buyers, sellers, builders and everyone else out there. At what point do we get to do our jobs?
Thursday, July 16, 2009
Morgan Loan Mods are slow like everyone else
I read in the WSJ today that Morgan's servicing unit (Saxon - remember them from the heydays of subprime?) has modiified only 6% of their servicing portfolio. That's not a surprise. Modifications, even the FNMA, Freddie MAC prime loan modifications are put on the back burner at all the major banks that I know of. These loans actually don't require much to close, less than a traditional refinance, but for some reason despite the easy approval process, they take much, much longer to get looked at.
It's odd since it's my understanding that the gross margins are actually pretty good on them. I guess it's just one of those things.
It's odd since it's my understanding that the gross margins are actually pretty good on them. I guess it's just one of those things.
Tuesday, June 23, 2009
The Condo Approval Morass
It's not enough to qualify and approve the borrower, nor has it ever been, but when someone is buying in a condo or coop, the building must also be approved. This has become increasingly more difficult as condo / coop approval departments are overloaded increasing turn times, but also as Fannie Mae and Freddie Mac begin enforcing rules that up for years were not enforced.
One major hurdle with existing condos and new development condos is a line item in the budget for reserves that equals 10% of the budget. In most, if not all, of the other states in the Union, this is not an issue. But here in New York, it's becoming increasingly more of an issue. New York City has always gotten away without creating a reserve funds for 2 reasons. The first is that the NY Attorney General's office, which approves all condo offering plans, doesn't require it. The second is that here in NY the argument was made that if the budget ran low, or if a capital improvement was needed, there would be a special assessment to pay for it. Fan/ Fred went along with this, but not anymore.
So most budgets on new developments (though they are faster to change, needing the sales) and existing condo project don't have a reserve line item in the budget. They frequently have a contingency line item, but it doesn't add up to anywhere near 10% of the annual budget.
What do you do? Create a reserve analysis, that's what. You'll have to show that the contingency is enough for the capital improvements without a special assessment to the condo owners. This can be done by aggregating the amount that the contingency will accumulate in the next years before any major improvements or repairs need to be done. This is especially useful with new development where the assumption is that since it's newly built, it will be 10-25 years before the building will require a new roof, exterior work or other major expenses or improvements.
Another hot button is the pre-sales requirement for Fannie Mae approval. This has increased to 70% of the units for most developments. This is coupled with a new math in determining the pre-sales in a building as well. Sponsor held units are now counted, whereas before they were not, also any rental units (here in NYC some apartments in a conversion are rent regulated making it difficult to remove tenants) are now counted. Before they were not. Also any investor owned units are not counted. So what you have left is all of the owner occupied and second home units in a building. That can be tricky for areas like Miami, LA, SF, Vegas and NYC. This is on top of an already down market, so it's reducing the deal flow even more, since many banks will not offer financing in a building that is not approved by Fannie Mae. Even if the mortgage is not being sold to them, it's considered the gold standard for condo / coop approval.
If the building is a ground up new construction and less than 200 units, then it's possible to get it approved at 51% pre sold. If it's a conversion of any size then it's more likely to be 70%. There is a process by which Fannie Mae will do a full review of the building and approve it at a lower pre sale, but generally speaking it needs to be at least 51% pre sold (remember these need to be owner occupied or 2nd home buyers) and have good sales velocity. Also the developer needs to pony up a $1200 application fee along with $30 per unit for the review. There is quite a bit of documentation that is needed as well.
If that wasn't enough, the scrutiny of the building's insurance coverage has also gotten a bit tougher. The Fidelity Bond coverage is a bit more restrictive, also if the building's coverage does not cover an individual unit from the studs in, then the homeowner will need to buy insurance to make up the difference.
Managing Agents don't seem to be stepping up to the plate in this changing world either. They aren't completing questionnaires fully so that the building can be properly assessed. This is despite the fact that in NYC, they charge a fee for its completilon, sometimes as high as $125. They need to understand that they are doing their owners a disservice by not completing the questionnaires and providing as much information as they can to help the approval process along. Everyone in the process understands that it's a hassle, but it's not the man on the street's decision, it's much, much higher up than that.
One major hurdle with existing condos and new development condos is a line item in the budget for reserves that equals 10% of the budget. In most, if not all, of the other states in the Union, this is not an issue. But here in New York, it's becoming increasingly more of an issue. New York City has always gotten away without creating a reserve funds for 2 reasons. The first is that the NY Attorney General's office, which approves all condo offering plans, doesn't require it. The second is that here in NY the argument was made that if the budget ran low, or if a capital improvement was needed, there would be a special assessment to pay for it. Fan/ Fred went along with this, but not anymore.
So most budgets on new developments (though they are faster to change, needing the sales) and existing condo project don't have a reserve line item in the budget. They frequently have a contingency line item, but it doesn't add up to anywhere near 10% of the annual budget.
What do you do? Create a reserve analysis, that's what. You'll have to show that the contingency is enough for the capital improvements without a special assessment to the condo owners. This can be done by aggregating the amount that the contingency will accumulate in the next years before any major improvements or repairs need to be done. This is especially useful with new development where the assumption is that since it's newly built, it will be 10-25 years before the building will require a new roof, exterior work or other major expenses or improvements.
Another hot button is the pre-sales requirement for Fannie Mae approval. This has increased to 70% of the units for most developments. This is coupled with a new math in determining the pre-sales in a building as well. Sponsor held units are now counted, whereas before they were not, also any rental units (here in NYC some apartments in a conversion are rent regulated making it difficult to remove tenants) are now counted. Before they were not. Also any investor owned units are not counted. So what you have left is all of the owner occupied and second home units in a building. That can be tricky for areas like Miami, LA, SF, Vegas and NYC. This is on top of an already down market, so it's reducing the deal flow even more, since many banks will not offer financing in a building that is not approved by Fannie Mae. Even if the mortgage is not being sold to them, it's considered the gold standard for condo / coop approval.
If the building is a ground up new construction and less than 200 units, then it's possible to get it approved at 51% pre sold. If it's a conversion of any size then it's more likely to be 70%. There is a process by which Fannie Mae will do a full review of the building and approve it at a lower pre sale, but generally speaking it needs to be at least 51% pre sold (remember these need to be owner occupied or 2nd home buyers) and have good sales velocity. Also the developer needs to pony up a $1200 application fee along with $30 per unit for the review. There is quite a bit of documentation that is needed as well.
If that wasn't enough, the scrutiny of the building's insurance coverage has also gotten a bit tougher. The Fidelity Bond coverage is a bit more restrictive, also if the building's coverage does not cover an individual unit from the studs in, then the homeowner will need to buy insurance to make up the difference.
Managing Agents don't seem to be stepping up to the plate in this changing world either. They aren't completing questionnaires fully so that the building can be properly assessed. This is despite the fact that in NYC, they charge a fee for its completilon, sometimes as high as $125. They need to understand that they are doing their owners a disservice by not completing the questionnaires and providing as much information as they can to help the approval process along. Everyone in the process understands that it's a hassle, but it's not the man on the street's decision, it's much, much higher up than that.
Sunday, May 31, 2009
HVCC Sucks
Recently New York Attorney General, in an effort to raise his image, fight corruption and save the American consumer from themselves, went to Fan/Fred and created the Home Valuation Code of Conduct that all mortgage originators (big and small) must abide by. On the surface, it sounds great. Greater appraiser independence, less commissioned individual involvement. Without going into how Mr. Cuomo decided that appraiser's were blameless in the recent fraudulent housing sales (it seems that every fraud ring includes at least one), the fact that the one party, the Loan Officer, who knows everyone in the transaction is completely (and I mean completely) removed from the coordination of the appraisal is crazy. Who do you think everyone, buyer, seller, seller's attorney, buyer's attorney, buyer's agent, seller's agent and even in house operations staff is going to call when the appraisal hasn't been scheduled in a timely manner? You got it...the Loan Officer. The one person who literally can do nothing. The one person who doesn't know who the appraiser is, what is their email address or telephone number or any other information. And the one person that the 3rd party vendor (owned by the banks) won't speak to or include in the process even as a spectator.
The break down is in the logistics. Loan Officers are the 3 monkeys in this case (see no, hear no, speak no). And we are the only party who's sole job is the coordinate all the players in the process. I guess Mr. Cuomo didn't think that through went he ran to Fan/Fred with his brave new idea.
Another aspect to the HVCC, is if there is a mistake on the appraisal, say for instance the appraiser noted that the unit appraised was 4B when it should have been 4FB or E4B. We cannot make a quick call to have it changed, nor can we contact the 3rd party vendor to have it changed, no the (currently overworked, can you say refi boom?) operations staff is the only one who can have it changed. And who fields all of the complaints when this isn't done for 3 weeks? You guessed it, the Loan Officer.
I agree with the gist of the HVCC, Loan Officers (including Mortgage Brokers) shouldn't have leverage over appraisers on the valuation of the home. Appraisers have licenses that can be held over their heads (not to mention felony charges) on these issues. But for the Loan Officer not to have access to even the 3rd party vendor to make a correction, make sure the correct phone is on the order, follow up on a order that is taking 4 weeks, is lunacy. Now the pendulum has swung too far to the other side. If we, as consumers, want to have our purchase and refinance transactions close within our lifetimes, we're going to have to have some Loan Officer input.
The break down is in the logistics. Loan Officers are the 3 monkeys in this case (see no, hear no, speak no). And we are the only party who's sole job is the coordinate all the players in the process. I guess Mr. Cuomo didn't think that through went he ran to Fan/Fred with his brave new idea.
Another aspect to the HVCC, is if there is a mistake on the appraisal, say for instance the appraiser noted that the unit appraised was 4B when it should have been 4FB or E4B. We cannot make a quick call to have it changed, nor can we contact the 3rd party vendor to have it changed, no the (currently overworked, can you say refi boom?) operations staff is the only one who can have it changed. And who fields all of the complaints when this isn't done for 3 weeks? You guessed it, the Loan Officer.
I agree with the gist of the HVCC, Loan Officers (including Mortgage Brokers) shouldn't have leverage over appraisers on the valuation of the home. Appraisers have licenses that can be held over their heads (not to mention felony charges) on these issues. But for the Loan Officer not to have access to even the 3rd party vendor to make a correction, make sure the correct phone is on the order, follow up on a order that is taking 4 weeks, is lunacy. Now the pendulum has swung too far to the other side. If we, as consumers, want to have our purchase and refinance transactions close within our lifetimes, we're going to have to have some Loan Officer input.
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