Adios to the HVCC?

By
Real Estate Agent with LaMar Real Estate

Did all the complaining work? It appears that the controversial Home Valuation Code of Conduct (HVCC)–an appraisal system that was the brainchild of Fannie Mae and Freddie Mac and caused much aggravation amongst Realtors, home buyers and sellers, mortgage brokers and appraisers–may be thrown out the window.

The House Financial Services Committee approved a bipartisan amendment last week that would terminate the Code and replace it with a new set of rules and creation of a new Consumer Financial Protection Agency. The new rules would apparently not be as confining upon appraisers, a problem that caused many property appraisals to come in exceedingly low, which in turn caused many home purchase deals to fall out of escrow.

The purpose of HVCC was to give independence to home appraisers. It created a slew of appraisal management companies, used by many lenders, who would in turn pay the appraisers a fee to work an appraisal. Oftentimes these fees were low and less than appraisers normally made.

Many appraisers were obtained from out of the area, which unfortunately meant that they were often unfamiliar with the neighborhoods in which they were working, AND they sometimes lacked experience (as established, experienced appraisers would not work for such reduced wages).

Furthermore, these management companies would then charge all or a portion of the appraisal fee to the home purchaser, making a nice profit in the end. These factors caused many escrows to be delayed, and others even fell through because the value did not match comparably sold properties.

Over the last several months the National Association of Realtors, the National Association of Home Builders and the the National Association of Mortgage Brokers have been standing behind member complaints to push for changes to the HVCC. It seems to be finally working. If the new rules come into play the housing market should be able to continue on the road to recovery.

Just goes to show you how DOING SOMETHING makes a difference!

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Tags:
hvcc
home valuation code of conduct
mortgage news
home appraisals
appraisal news
rachel lamar

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Rainmaker
301,703
John Occhi
Mason Real Estate - Temecula, CA
SRES,CPRES.ePRO - Temecula-Murrieta CA Real Estate

Not quick enough...I had 4 excrows last month that were delayed due to appraisals that resulted in the reduction of contract price to meet the appraisal value.

 

Nov 01, 2009 11:16 AM #1
Rainer
59,530
Dennis Puckett
Adams,Cameron & Co. - Deland, FL

Great news. It can't happen quick enough. I've already had several deals fall through over this.

Nov 01, 2009 11:24 AM #2
Rainmaker
1,245,427
John Pusa
Sellstate Pacific Realty - Glendale, CA
Your All Time Realtor With Exceptional Service

Hi Rachel,

Thank you for sharing an educational and helpful article.

John Pusa

Nov 01, 2009 11:33 AM #3
Rainer
17,958
Rachel LaMar
LaMar Real Estate - Carlsbad, CA
J.D., SFR

Yes, I hear everyone's pain. I had one almost cancel as well, but we worked it out (or rather, I took a hit to make it happen). I am hopeful that this will make a difference, but you are all correct in that it can't happen soon enough.

Nov 01, 2009 11:44 AM #4
Rainer
27,290
Alix Pinzon
Southern California Mortgage Lending - La Habra, CA
Lic# 1167761

Appraisers are holding on by a thread, waiting for the Senate to dissolve HVCC.  If it doesn't, many of them will be leaving the industry.  Aside from the greed factor, there's no way for an appraiser to remain independent with the AMC's breathing down our throats.

Nov 09, 2009 04:15 PM #5
Rainer
60,970
Alix Pinzon
Open Mortgage, LLC - Downey, CA
(562)743-6086

Hi Rachel,  I'd like to remind you to contact your Senators, and advise them how negative HVCC has been on your business.  The Consumer Finance Act of 2009 is being discuss in the Senate, and it contains an amendment that would eliminate HVCC.  This may be the last chance to reverse it.  I know that you've been against HVCC from the beginning.  Thanks for your support!

Nov 15, 2009 09:01 PM #6
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Rainer
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Rachel LaMar

J.D., SFR
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