The Appraisal Buzz is thrilled that Bill Brown found time in his busy day for an interview. As President of the National Association of REALTORS® (NAR), Bill has written to the Federal Housing Finance Agency to voice NAR’s thoughts on pending appraisal waivers planned by Fannie Mae and Freddie Mac (GSEs).
BUZZ: Bill, thank you so much for your time today. Can you start off by telling our readers about how you got started in this industry and how you ended up at NAR?
BILL: Absolutely. I’m a second-generation REALTOR® and have been active in organized real estate for more than 35 years. Before becoming President at NAR I served on numerous positions at the local, state, and national level. I’ve actually been an NAR Director since 1991 and was Chairman of the RPAC Trustees in 2004. I also served twice as a Committee Liaison and as a Regional Vice President.
BUZZ: Can you explain further your current role at NAR?
BILL: Being president means I serve on NAR’s Executive Committee, on the Board of Directors, and Leadership Team. It’s a tremendous opportunity to speak on behalf of 1.2 million fellow Realtors® and help shape the industry we work in.
BUZZ: What is NAR’s position on the GSE’s forthcoming appraisal waivers?
BILL: At this time we’re still examining the possible effects. We are working closely with leaders at the Federal Housing Finance Agency FHFA and within the industry to look at the potential impact while keeping our membership up to speed on the issue.
BUZZ: What does NAR see at the unintended consequences of the waivers?
BILL: Appraisals are an important part of the home buying and selling process. They give consumers an expert opinion on the value of what they’re purchasing and a level of certainty that they’re making a sound financial decision. We understand the GSEs are moving to eliminate appraisals in some limited circumstances, but the key there is the word “limited.”
We need to make sure that whatever changes occur still allow for an appraisal process that protects consumers with good information and sound financial markets.
BUZZ: What does NAR believe is the short-term and long-term impact of the waivers?
BILL: At this point it’s hard to say, but we’re urging caution as FHFA moves forward. There are a lot of unanswered questions, particularly about the quality of the GSEs valuation methods. More to the point, we still don’t know how many homes will not have a traditional appraisal or which metro areas and regions of the country will be affected most. It’s concerning that we don’t have answers to these questions.
BUZZ: What would NAR like to see to regarding appraisals and mortgage regulation that would reduce credit risk and a repeat of the last real estate recession?
BILL: There are a few things FHFA could do that would get us going in the right direction again. First, it’s important that lenders make their customers aware when a given transaction doesn’t include a traditional appraisal. NAR is also urging FHFA and the GSEs to develop appropriate disclosure parameters for lenders to share with borrowers regarding GSE valuation methods.
That’s not a complete list, but it would be a good start towards arming consumers with better information while preserving the safety and soundness of markets.
BUZZ: Anything else you would like to add?
BILL: This was great, thank you. I really appreciate the opportunity to raise this issue.