We've been into new Federal Home Valuation rules now for just over a month, and as predicted the outcry of incompetence and price gouging has just begun.  In the past, mortgage originators could pick a licensed appraiser to appraise value on a home refinance or purchase.  Most originators that I know developed good business relationships with appraisal professionals who do good, competent and timely work.  In the current system, appraisers who have the lowest competence and business standards are lumped equally with the best of professionals.

The new law requires the lender (bank) to order their appraisal through an appraiser pool (called an AMC).  Because of this new law,  I am hearing horror stories from every loan originator that I know. Appraisal prices have gone up.  Poor work is resulting in multiple appraisals.  Appraisal time has lengthened and contractual time lines are not being met.  Seattle and Eastside appraisals are being assigned to out of town appraisers, such as Yakima and Vancouver, who really don't know anything about local real estate trends and values.

 Industry professionals have created an online petition for the repeal of this new law (www.hvccpetition.com).

Here are some exerpts from comments left by petition signers:

"HVCC rewards the incompetent appraisers who were banned from approved lists and now rewards them the same as the "good guys". We get worse product, worse turn times, and higher fees, causing the consumer higher costs with higher rates, due to longer closings. Only the government can think up ways of killing business progress, and this is a fine example. The market would weed out the incompetency. Too bad there isn't a HVCC to weed out the over-ambitious policy makers. Repeal this bill, now."

"How is HVCC progress in consumer protection? I had to beg a bank not to cancel a contract for an REO purchase when it took the AMC 15 days to get the property inspected and another 7 days to review the appraisal. During the process the AMC raised the cost to the client 3 times. fortunately we did close, otherwise it would have cost the consumer a lot of money for nothing."

"This HVCC rule has already caused my customers to pay for multiple appraisals because they can't transfer if we need to change lenders due to an issue with the current lender. My customers have not been happy about that and it's costing them more. This needs to be reversed as it is not a good plan at all. It's taking rights and money from the consumers NOT saving them money nor is it beneficial!"

"Three quality homeowners this month alone have been forced to pay higher interest rates because of HVCC and the lack of experience of the appraisers hired by the appraisal management companies."

"So slow. I had one processor tell me it took 12 days after ordering the appraisal just to get the appraiser to the borrower's home."

"The very first loan I had that required an HVCC appraisal was killed due to an appraiser who got both the bathroom count wrong and the square footage measurement wrong. The lender was so backed up with similar cases, they would not review and correct the appraisal. My clients are out $434 for a faulty appraisal and they did not get their loan. We were going to reduce their interest rate from 8.0% down to 4.75%. This was important because they are semi retired and living on a fixed income."

And on it goes.......

If you are an industry professional and would like to view and sign this petition, go to www.hvccpetition.com.

By Greg Perry
www.425Realty.com