Lender groups are making a last-ditch effort to stop the Department of Housing and Urban Development from issuing a final rule that would make lenders accountable for inaccurate appraisals on Federal Housing Administration loans.In a letter to the Office of Management and Budget, six trade groups contend that the FHA does not have the legal authority to hold lenders responsible for the property value estimates made by independent appraisers. The letter includes a legal opinion commissioned by the Mortgage Bankers Association. "The legal opinion indicates that the FHA has no specific authority to create a rule of 'no-fault' liability for appraisals and that HUD may not challenge the validity of FHA insurance on a loan or impose penalties absent lender knowledge of any loan deficiencies," the joint letter says. "We believe the rule, as proposed, violates both of these standards." The American Bankers Association, the American Financial Services Association, America's Community Bankers, the Consumer Bankers Association, and the MBA signed the Feb. 4 letter.
