Dennis Norman
By:Dennis Norman
Practically the entire real estate industry seems to be abuzz about the Home Valuation Code of Conduct (HVCC) that went into effect May 1st. I first wrote about it back in early April in a post on this blog.
Since Fannie Mae and Freddie Mac implemented the new rule there have been many questions and much confusion about what the Home Valuation Code of Conduct (HVCC) does or does not do. I thought it would be helpful to cover some of the more common questions here,this is not meant to be a complete picture of everything entailed in the new rule but some FAQ’s.
Q- Does the new rule apply to ALL home loans?
A- No,just on homes and up to 4 unit residential buildings and then only on loans that will be sold to Fannie Mae or Freddie Mac.
Q- What about FHA and VA loans?
A- No,HVCC does not apply to FHA or VA loans nor Federal Home Loan Bank loans either.
Q- Do lenders have to use an Appraisal Management Company (AMC) to order appraisals?
A- No,lenders may order the appraisal directly from an independent appraiser.
Q- Are my agent and lender forbidden from talking with the appraiser?
A- No,your agent and/or lender may talk with the appraiser if it involves requesting that the appraiser consider additional data or information in determining his or her valuation or for the purpose of correcting an error.
Q- Can I (the borrower) pay the appraiser direct for his services?
A- No,the appraiser must be paid by your lender or the Appraisal Management Company (AMC).
Q- Can my lender transfer an appraisal to another lender if I change lenders or will I have to pay for another appraisal?
A- There is nothing in HVCC that prohibits the transfer of an appraisal provided the original lender (the one that ordered it) authorizes the transfer.
As I stated at the beginning this is not intended to be a complete description of everything contained in the HVCC but hopefully answers some of the more common questions. If you have additional questions I would invite you to submit them via a comment. Also,it seems many appraisers read my earlier post and will perhaps read this one. If you are an appraiser and would like to offer additional information or more answers to FAQ’s please submit them via a comment and I will post them to get the information out there.
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Love the info.
Helpful info . Thank you. I will have to pass it along others.
This is will be a huge money maker for the AMC’s. This puts all Appraisers in the same category,good and bad…alike. I have been in the mortgage industry for the past 24 years,and Underwriting for the past 10. I have seen bad appraisals,and personally reported the appraiser to HUD,as well as the State licensing boards,and therein lies the problem. The governing bodies have done nothing to the Appraisers. They have been free to put on an appraisal whatever they want without recourse. Why do we have USPAP Standards if we are not going to enforce the regulations already in place. This will put the bad appraisers on the same playing field as the good appraisers. I have seen appraisals from appraisers who live over 150 miles away from the subject property,and I can not have a conversation with the appraiser. The attitude of the appraiser has also been affected since the inception of the HVCC. Some appraisers now know their performance on an appraisal,either good or bad,can not be questioned,and their attitude reflects it.
I do not believe the HVCC in its current state will be the solution the industry needs. I believe if we simply removed the “BAD ”appraisers…repeat offenders…from the industry and enforce the standards already in existence we would be further ahead
Sincerely
I AM CERTIFIED RESIDENTIAL APPRAISER IN FLORIDA. IT IS FEBRUARY 28,2010 AND I STILL HAVE NOT RECEIVED MY COMPENSATION FOR JOBS DONE MONTHS AGO (NO CHECKS THIS MONTH) SOME AMC SIMPLY IGNORING MY CALLS OR ARE OUT OF BUSINESS. NOT LONG. AMC AND HVCC ARE THE MONEY MAKERS AND ARE NOT WILLING TO DO ANYTHING AT ALL TO HELP YOU. AFTER ALL THINK ABOUT IT,THEY MAY HAVE 2-10 OR MORE ORDERS ORDERS A DAY FROM BRANCH (HOW MANY OF THEM YOU COUNT ON THE WAY TO WORK? ) AND MAKE A COOL $ 600-$ 800 A DAY DOING ABSOLUTELY NOTHING BUT HIRING APPRAISER FOR THE LOWEST COST POSSIBLE AND PRO MISS YOU A SWEET DEAL. FROM THE VERY BEGINNING THEY DON’T HAVE HAVE ANY INTENTIONS TO LEND THE MONEY IN ANY WAYS JUST LIKE THEY LENDED MONEY THEY DID HAVE BEFORE THE CRASH. WOW THIS IS A GOLDMINE ISN’T IT? ON THE TOP OF THIS 80% +/- OF AMC ARE OWNED AND OPERATED BY MAJOR BANKS BANKS. AMC ‘S HIRE CHEAPEST PEOPLE TO WORK WITH TO MAXIMIZE THEIR PROFIT AT YOUR COST,YOUR FEE IS $ 450-650 APPRAISERS GET $ 125-200. MY INSURANCE MEMBERSHIPS,MLS,SOFTWARE,FLOOD MAPS,LICENSES CE EDUCATION ETC.(ALL REQUIRED) EXCEED MY MONTHLY INCOME AFTER HVCC AND AMC TOOK EFFECT. I AM BROKE GETTING OUT OF THIS MESS AND YES I WAS PRESSURED TO MINGLE WITH THE VALUE BY AMC’S (HAVE COPY F E-MAIL) BUT SO WHAT? THERE IS NOTHING OR NOBODY I CAN SEND IT TO OR REPORT TO,AS MUCH AS I WOULD LOVE TO. THIS IS WILD WEST.
AT THE END OF THE DAY I’LL BE OK,I DO HAVE B.A. AND IT COUNTS FOR SOMETHING. MEANWHILE,PEOPLE WILL GET ROBBED AND MOBBED BY THE AMC AND HVCC. AND DO NOTHING ABOUT UNTIL IS THEIR TIME TO BUY OR REFINANCE OR SELL AND WILL BE OUT OF $900 (2 APPRAISALS SINCE THE ONE THAT CAME IN WITH VALUE WILL NATURALLY NEEDED REVIEW ONLY FOR THE SECOND ONE TO COME AND KILL IT) GOOD LOCK!!!!
You give the wrong impression. My friend lost her real estate refinance because the appraiser used the wrong number of bedrooms. She sent two old appraisals,but the lender refused to talk to the appraiser because of HVCC. If correcting mistakes is okay,my friends lender did not think so and would not make any contact whatsoever with the appraiser. They offered to do the deal over again from the beginning and hope for a better appraiser.
Also,local lenders in Santa Fe are under the impression they can’t use independent appraisers and a broker yesterday told me he will not use independent appraisers because of HVCC. So there’s what you say,and what is really going on.
Thank you for your comment. The information in my post on HVCC I believe is accurate in terms of what is permitted under HVCC. It is consistent with information published by Fannie Mae as well as the National Association of REALTORS(R).
It sounds like your friend had a bad experience and her situation may have not been handled properly. Unofortunately when new regulations come out there is a time of period where the industry finds itself in a learning curve. Some are not aware of what is permitted or prohibited and others,usually those lacking a complete understanding of the regulation,sometimes overreact,which is unfortunate.