FHFA has just released the "Examining the Making Home Affordable Plan" testimony by Patrick J. Lawler, Chief Economist for the FHFA.   

Mr. Lawler said in his opening remarks,

"The Making Home Affordable plan is a critical component of President Obama’s financial stability plan. The affordability plan reaches out to millions of American homeowners who are trying to keep their homes in these difficult economic times to help them refinance or modify their mortgages so that they will have more affordable mortgage payments. My testimony today will summarize the prominent role of Fannie Mae and Freddie Mac in this plan and progress made in implementing the plan."

In a later section Lawler said,

"If we are going to stabilize the housing market, we have to address that 50 percent, which comprises mostly subprime and alt-A loans. We believe Fannie Mae and Freddie Mac must be leaders in improving, promoting, and enforcing industry standards and best practices for all mortgages, and their roles in Making Home Affordable reflect that"

The section of his testimony that might be of most interest to appraisers is under the heading "Implementation of the Making Home Affordable Plan".    There, they use the terms:

• Net Present Value model
• Acceptable discount rates
• property valuation methodologies (government-speak for AVMs?)
• house price appreciation assumptions

The other section that I find interesting deals with the "Incentives" that are paid to "Servicers"for modifying these troubled loans.    Are they rewarding bad lending practices by paying incentives to the same people (Servicers) that made the bad loan in the first place?  

How kewl is THAT?!  I'm sure appraisers would like to be paid an "incentive" to re-appraise properties that people now claim were "Over-valued".    Nope . . .Instead they create the HVCC that effectively institutionalizes the need for AMC middle-men which hack appraiser's fees to the bone!

Click here for the complete testimony.