You should all know how much I have HVCC. No disrespect to appraisers, they hate it too, but when anyone can do produce a product and have NO accountability to the product they are producing, the quality deteriorates! HVCC was such a night mare! It drove values down an additional 15 to 20% – thank you Cuomo!
It is amazing how when anything goes wrong, the typical reaction is to swing too much in the opposite direction. For those of you that don’t know what HVCC did, it created a system where banks could no longer choose the appraiser they wanted to use. In stead a bank had to go to a “middle man” one that added more time to a time sensitive issue, and took part of the fee from the appraiser. This “middle man” would then send the order to one of the appraisers in the database. The worst part is there was no recourse for the work done by that appraiser.
I talked with appraisers. They were starving for work. In some cases, they had to spend their day in front of a computer waiting for a new appraisal to pop up and try to accept before another appraiser did. At times, they would click all day to get an order. Then they might get an order in Surprise followed by Gilbert follow by Scottsdale followed by Goodyear. They were all over the valley. Let’s face it, American business is about who you know. We use the people we like and trust. If they screw up there is a line of replacements. That works.
Thank you for removing this EVIL HVCC!
Obama Signs Bill Eliminating HVCC
by JON PRIOR
Friday, July 23rd, 2010, 1:25 pm
When President Barack Obama signed the Dodd-Frank Act this week to reform the financial markets, the Home Valuation Code of Conduct (HVCC) was officially set for elimination in 90 days.
The Federal Housing Finance Agency (FHFA) implemented HVCC in May 2009 in an attempt to improve the independence of appraisers by prohibiting lenders and third parties from influencing appraisals. It’s a controversial regulation, leading to an increase in demand for appraisal management companies (AMCs) and complaints from independent appraisers who claim they’re being cut out of the market.
Before the Congress passed the bill, a congressional conference took place to reconcile versions from the House and Senate. Lawmakers pu a new set of “appraisal independence standards” into the bill to replace of the HVCC.
The “appraisal independence standards” will be written over the next 60 days. The newly enacted bill, unlike HVCC, allows Fannie Mae or Freddie Mac to accept any appraisal report completed by an appraiser selected or paid by a mortgage loan originator.
The reform also stipulates that the new standards will include a requirement that lenders and their agents pay appraisers at market rates.
The new standards will still subject loan originators to any state or federal laws that prohibit it from making payments, threats or promises to an appraiser to influence the work. But nothing in the standards will prohibit a person with an interest in the transaction from asking the appraiser to consider other information, provide further detail or correct errors in the appraisal.
A spokesperson at OK Appraisals, a company based in California, said he’s still waiting to see the new rules.
“Good riddance to HVCC. We now have to see what the Fed will write … as to the concrete rules on appraiser independence. Hopefully nobody will be excluded from ordering an appraisal,” the spokesperson said.
According to a client alert from K&L Gates, an international law firm that represents capital market players, the end of HVCC will not mean the end for AMCs.
“While the HVCC may be fading into the sunset, don’t expect the same fate for AMCs, AVMs, and BPOs,” according to K&L Gates.
Write to Jon Prior.
480-652-2004