Today, I blogged about a new policy that went into effect on May 1st, 2009 regarding the new Home Valuation Code of Conduct or the "HVCC." The new code grew out of a lawsuit filed by the Attorney General of New York, Andrew Cuomo. While the intent of the new code is well meaning, there are a few flaws to note. One big flaw is the partial ownership big banks have in the Appraisal Management Companies, or the new middlemen of the appraisal industry. According to the new code, appraisals of 1 to 4 unit properties must be ordered through Appraisal Management Companies to ensure the integrity of the appraisal. However, here is the snag. If the point is to keep the appraisal process separate from the lending process by way of the "Appraisal Management Company," then what sense does it make for a big bank to have even a partial ownership interest in such a company.

It is a new can of worms.

For more info, please refer to my blog entry. Your feedback and thoughts are valued.