The Home Valuation Code of Conduct, a brainchild of New York Attorney General Andrew Cuomo, whuch became law as a regulatory mechanism on the hiring and management of the appraisal process, could see the end of it's economic life. The HVCC, along with hundreds of other governmental regulatory laws enacted, should have never became law.
Shortly after it became law, I wrote and overview from the perspective of an appraiser and free market capitalism.
In October of 2009, Rep. Gary Miller, (R:CA), joined by Rep. Michele Bachmann (R:MN), Rep. Childers (D:MS) and Manzullo (R-IL), offered an amendment to sunset the HVCC.
Now, it appears Senator Casey (D:PA) will offer similar language to the Senate. This will be very welcome news to all industries associated with the housing market and free market capitalists everywhere.
Dagan McDowell of FOX Business News has more on the potential demise of HVCC. Take a listen:
One can only hope the HVCC is put behind us, but even if the government sunsets the law, one wonders if banks, many of whom are partially owned by the government, and government sponsored entities such as Fannie Mae and Freddie Mac, will still implement the standards of the code.
Showing posts with label Fannie Mae. Show all posts
Showing posts with label Fannie Mae. Show all posts
Thursday, May 13, 2010
Monday, February 23, 2009
Fannie Squeezes Condo Loan Requirements
The statistics detailing the carnage of the housing crisis is daunting and not for the faint of heart. Although single family improvements, in the form of houses, have been clobbered, the condo market is in shatters.
Although many condo projects, particularly those built as condos rather than apartment conversions, had a minimum percentage of available units which could be sold to investors, and clearly those in charge relaxed those requirements.
Now, with an incredible overhang of distressed (foreclosed on, short sale or pre-foreclosure) condo units for sale, values are stung with negative pricing pressures which could sink the most savvy investors, and almost all are "under water".
The only hope is for the existing inventory, now with prices that are quite affordable and attractive, to be burned off in the form of sales.
Enter Fannie Mae, or the Federal National Mortgage Association, which has installed new stricter guidelines on condo sales escalating the already monumental degree of difficulty in moving these properties.
Among the changes which will dramatically effect sales is that Fannie Mae is requiring that of a building's unit owners, no more than 15% may be delinquent on association fees as a condition of funding home loans to new buyers. That practically takes Fannie Mae off the table.
I own a condo, built as a condominium complex, in a centrally located area of southeast Orlando. The amount of building owners delinquent on association fees far exceeds 15%, and this well built complex is a leader in the area.
Most condo sales are cash only these days anyhow, but these requirements, along with a jump from 50% to 70% of the units as sold or under contract, has essentially eliminated Fannie Mae from the condo market. If the goal is to work off this inventory, this cannot be a welcomed development. One has to wonder why this move was made?
Although many condo projects, particularly those built as condos rather than apartment conversions, had a minimum percentage of available units which could be sold to investors, and clearly those in charge relaxed those requirements.
Now, with an incredible overhang of distressed (foreclosed on, short sale or pre-foreclosure) condo units for sale, values are stung with negative pricing pressures which could sink the most savvy investors, and almost all are "under water".
The only hope is for the existing inventory, now with prices that are quite affordable and attractive, to be burned off in the form of sales.
Enter Fannie Mae, or the Federal National Mortgage Association, which has installed new stricter guidelines on condo sales escalating the already monumental degree of difficulty in moving these properties.
Among the changes which will dramatically effect sales is that Fannie Mae is requiring that of a building's unit owners, no more than 15% may be delinquent on association fees as a condition of funding home loans to new buyers. That practically takes Fannie Mae off the table.
I own a condo, built as a condominium complex, in a centrally located area of southeast Orlando. The amount of building owners delinquent on association fees far exceeds 15%, and this well built complex is a leader in the area.Most condo sales are cash only these days anyhow, but these requirements, along with a jump from 50% to 70% of the units as sold or under contract, has essentially eliminated Fannie Mae from the condo market. If the goal is to work off this inventory, this cannot be a welcomed development. One has to wonder why this move was made?
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