The report is critical of the role of mortgage brokers in the wholesale mortgage marketplace. The report explores lender compliance or lack thereof and liability with FIRREA in mortgage markets dominated by mortgage brokers.

The paper is intended to provide a clear understanding of the duties and responsibilities that a lender must comply with when performing their fiduciary duties involving real estate-related financial transactions, including the utilization of mortgage brokers. Appraisal professionals who serve on the CRAVs Partners Council identified this issue for discussion, collaboration and as legislative and regulatory policy priority for the new Center.

Consumers and valuation professionals alike have repeatedly expressed concern about undue pressure from brokers that often is condoned by originators and securitizers in the financing of homes, said John Taylor, president and CEO of the National Community Reinvestment Coalition (NCRC) and a founding board member of CRAV.

CRAV is calling upon Federal and State officials to intercede. This non-compliance creates exposure for all parties to a mortgage transaction - from Main Street to Wall Street - and an ethical dilemma for valuation professionals to either be complicit with the wink and nod or to lose business from brokers and lenders who are gaming the system and creating a safety and soundness issue in the market and for consumers alike.

The truth of the matter is that many honest appraisers have seen their businesses reduced or destroyed while others have had their integrity compromised in a situation that seems beyond their control. We will forcefully work to change this problem and invite responsible lenders and appraisal professionals to participate in the CRAV and work for policy change on Capitol Hill with us, stated Jay Delich, president of ArizonaAppraisal.com of Scottsdale, Arizona, and a member of the CRAV Partners Council.

CRAVs white paper is intended to focus attention upon this critical issue at a time of change in the marketplace. It is both intended to educate lender Board of Directors to their fiduciary duties, explore legal and regulatory expectations for compliance, and challenges the wholesale disregard for these requirements in the market relative to how mortgage brokers and lenders comply, or fail to comply - with these statutes.

Valuation Review will spotlight the white paper in an upcoming edition