Call to Action - HVCC

Regarding the point you made:

"After the appraisal is ordered through one lenders "preferred" Appraisal Management Company, you cannot take the appraisal to another lender."

Under USPAP (prior to HVCC), Appraisals could not be taken to another lender or "reassigned"  as illustrated in Advisory Opinion 26 below:

 SUBJECT: Readdressing (Transferring) a Report to Another Party

 APPLICATION: Real Property, Personal Property, and Intangible Property

 THE ISSUE:

 After an assignment has been completed and the report has been delivered, an appraiser may be asked to “readdress” (transfer) the report to another party.  Does USPAP allow an appraiser to “readdress” (transfer) a report by altering it to indicate a new recipient as the client or additional intended user when the original report was completed for another party?

No. Once a report has been prepared for a named client(s) and any other identified intended users and for an identified intended use, the appraiser cannot “readdress” (transfer) the report to another party.

I believe that the HVCC is the unfortunate result of lenders AND appraisers neglecting to follow USPAP (Uniform Standards of Professional Appraisal Practice).

Thanks for the post. I am so frustrated with these new rules. The result on my business are HUGE delays in closings, 3 out of 9 pending sales falling through completely -all due to VERY low appraisals.-that's a thirdof my business!  (ex: had 4 offers on a home for over $265,000 and appraisal came in at $238,000).

I work with investors who flip homes and now they are reluctant to even take an offer with financing becasue they have no idea if the deal will fall through....and because now these appraisals take as much as 3 weeks we are near Close of Escrow when it happens. EVERYONE suffers.

Result: further depressing property values in an already struggling market.....was that the intended outcome?

I can only hope enough of us in the field let our voices be heard and these rules are ammended.

AZ Broker for 8 years.

There is always government interference so one person they know will make a lot of money and cost consumers more.

Jeremiah: What a interesting post.. Great information. I will re-blog this as well.

Hi Jeremiah, I just had an appraisal situation yesterday, so this is a very timely post. I'll send it to my entire office.

This is a great post and I really appreciate the links to sign the petition and to send our feedback. I had a deal die because the appraiser was not qualified and the appraiser pool just sent some 20 year old kid that had done maybe 6 months of REOs...I will definitely be sending them the long drawn out explanation of how the HVCC really hurt my clients...

Hi Jeremiah -- One step forward...two steps backward.

I agree whole heartedly. There is one bright spot here. FHA is not participating. We lenders still have full control over who we place our FHA appraisals with.

As an honest mortgage banker/broker, I see what happened and what led up to this but this is not a viable solution.

Its became an absolute mess. The days where a appraiser had to search county records to make sure the value was accurate are gone. Now they only rely on MLS data.

Excellent information. I have already seen much longer appraisal times on a few occasions.

Appraiser are like any other industry.  There is always bad apples.  This however is not the way to deal with them.  Let the state agencies handle the bad apples.

This also is not the cause of the mortgage crisis.  The mortgage crisis is much deeper and roots are in Washington.  This is just a distraction for the root cause of the problems.

I was forwarded this e-mail by a local lender this morning.  Very timely post - I'm in the middle of dealing with an appraisal that came in way low by a not so reputable company even though the non-profit sellers had an appraisal done prior to listing. 

The cost for appraisals is an issue that I'm facing. Working with the same professional appraiser for years the price was $300, now my clients are paying $400+!

Thanks for the links. I have had two lenders say that this has added an average of two weeks to get something closed. That kind of bureaucracy we don't need.

Went over and signed the other day. Something really does ahve to be done. This has caused such expense, stress, and chaos, and customer service is so much harder to keep within high standards.

Jeremiah:

Sorry, I didn't consider the implications of the Mortgage Broker being the client vs. the Lender being the client.  I was under the impression that a Mortgage Broker could utilize an appraisal from one lender to another lender based upon Question #46 in "Home Valuation Code of Conduct Frequently Asked Questions".  Please copy the link below into your browser to get a copy of this document.

https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf

Thank you for the contact info.  I contacted several appraisal organizations and they ignored me, so now I can start over AND provide this contact info to my buyers who were totally screwed (am I allowed to say that?) by their appraiser.  You may remember my post about an out-of-area appraiser demanding a quid pro quo for the right value rather than just correcting his numerous errrors.