In a move that confirmed industry suspicions, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will not be funding the Independent Valuation Protection Institute (IVPI), as provided for in the Home Valuation Code of Conduct (HVCC). This essentially means that the IVPI will not be created, despite the agreement between Fannie, Freddie, and NY AG Andrew Cuomo.
In a news release, FHFA Acting Director Edward J. DeMarco stated, “As conservator for Fannie Mae and Freddie Mac, our priority is to keep the Enterprises focused on the important role they play in supporting the mortgage market. The need for a complaint process is being addressed in a way that we believe is more practical than with the Institute.” Instead, Fannie Mae and Freddie Mac will unveil a complaint process to address suspected violations of the HVCC “within the next few weeks.”
Mr. DeMarco provided additional details regarding this complaint process in a letter to Mr. Cuomo dated May 19, 2010. According to this letter, Fannie Mae and Freddie Mac will use a standardized complaint form, and an Internet-based complaint submission process: “The Enterprises will act on matters received including referring cases to state regulatory officials identifying patterns and practices suggestive of fraud or other noncompliance with the Code and providing FHFA and your [Cuomo’s] office a summary of results and analytics of this complaint process.”
According to the original HVCC agreement, Fannie Mae and Freddie Mac agreed to fund the IVPI to the tune of $24 million dollars over five years. The future of the IVPI became murky, however, when the twin mortgage giants were taken into conservatorship in September 2008.
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