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Two EVIL words for Realtors & Lenders ALIKE to get to know..."Undue Influence"...IMPORTANT information on HVCC rules!

Much like many of my posts, I am inspired by something that happened to me, is happening, or has happened to someone else, or in this case, a blog by another ACTIVE RAINER. I spoke to a couple of senior members on this website before I posted this information, because I had considered linking to the blog that inspired me, as well as some of the comments that had been left.. Well, after much thought, I have decided to just post information instead...and let everyone reading draw their own conclusions!

This is a VERY evil two word phrase right now, so be patient and I will tell you why!

First of all, there are NO WAYS AROUND the HVCC rules, period! - I thought I heard an echo.......yes, now I know I heard an echo! You simply cannot and should not, get around these rules!

Obviously by now, we ALL KNOW about, and are complaining about this ruling!

That is NOT the point of this blog!

Click here for a direct link to the HVCC rules!

Recently, the issue had been brought up regarding a REALTOR meeting the APPRAISER at the home and providing Comparables to said appraiser!

There are many quality Realtors like Lenn Harley that believe it is part of their JOB and responsibility to be there, especially if they are the listing agent! In this market, I AGREE! However, BE CAREFUL what you say!

Well, I was concerned about this, and did QUITE a bit of investigation on this topic PRIOR to writing this blog....and HERE is what I found out!

*****************************************************************

Here is a qoute from an Account Executive first, then I will follow with my other comments:

"Darin,
I heard back from a few different sources and they all agreed that no, a realtor would not be allowed to meet with the appraiser or give comps to the appraiser. Per the code could be looked at as undue influence on the appraisal."

Well, I didnt stop there. I then phoned a company that does 3rd party appraisals through RES DIRECT, which is Wells Fargo's "go to" company. I spoke to the "Head Honcho" there, and this is what he said...paraphrased....(btw- he preferred to remain anonymous, as well as their company)..I am currently honoring that wish!

His thoughts were that there is NOTHING wrong with a REALTOR (obviously in most cases the listing agent) meeting the appraiser at the home. He even went on to say that if they provide COMPS in a nice, professional folder, and dont TALK to them about value... he considers that just fine! He also thought it would be okay to walk around WITH the appraiser answering questions about the home, but again, HE STRESSED to NOT discuss home values or the current market conditions!

HERE is where it gets tricky and very precarious for a REALTOR! My contact went on to say that he receives a DAILY "UNDUE INFLUENCE REPORT". This report details Realtors that have been mentioned BY THE APPRAISERS THEMSELVES or the 3rd party COMPANY that employs the appraisers, for CALLING EXCESSIVELY, or for trying to "persuade them", or even ASKING questions regarding "pitfalls" and if they used or will be using a specific comparable etc..etc..etc.. In NO UNCERTAIN TERMS if he gets a Report on an ACTIVE LOAN with a REALTOR that has been mentioned on his "Undue Influence Report", WELLS FARGO will NOT BUY THE LOAN! Keep in mind, now we are not just talking about being there when the appraisal is done, we are also talking about KILLING THE DEAL!

I then took it ANOTHER STEP further...and spoke to 2 different appraisers! One of them I have never met in person, and only have had 1 transaction EVER with! She stated that she has NO PROBLEM with a LISTING agent meeting her at the house, but does consider a REALTOR providing her comps to use as "undue influence". Her logic is that the REALTOR is assuming she doesnt know how to do her job, and that by providing them, they are telling her where to look!

The 2nd appraiser felt ALMOST exactly the same. What she went on to say though was that even if a REALTOR provides COMPS for her to review, that they OBVIOUSLY still look up their own! However, there have been many cases where the COMPS provided actually MATCHED case for case on the ones that she used! She complimented Realtors for the job they do, but did say that they have a hard time understanding the rules THEY must follow concerning distance, recency of sale, size, and adjustment values!

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IN THE END, it truly does not matter HOW you feel about this subject, the rules are the rules! Obviously, these rules were created by the mis-use of the LENDER/APPRAISER relationship, and undoubtedly, were made worse by the pressure being put on the Lender by the REALTORS and buyers/sellers alike!

Here are DIRECT QOUTES from the HVCC rules:

Section 1

Sub-section B

requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser's completion of an appraisal report;

Or, Section IV

Sub-Section B

the lender, or its agents, and any appraisal company or appraisal management company providing the appraisal to the lender do not provide the appraiser any estimated or target value of the property or the loan amount applied for (except that a copy of the sales contract for purchase transactions may be provided);

UNDUE INFLUENCE - While they specifically mention LENDERS many time, they also list the word AGENTS too! This is being INTERPETED as Realestate Agents! My guess, is that the NEXT change involving HVCC will include the SPECIFIC words, REALTOR, REALESTATE BROKER,SELLING AGENT,LISTING AGENT and the like!....sooooooooooooo

Get to know it, and stay the heck away from it!

It's only 6 pages long! If you want a copy, email me at Darin@osmwi.com

Ill send you one!

Thanks for reading & Keep selling!

-Darin-

As always, I welcome your concerns,comments,issues and suggestions!

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Posted by Darin Osenberg on 06/19/2009 04:17 PM

Comments (79)

HVCC RULES CLARIFICATION! - Undue Influence! in the Mortgage / Finance Channel

hvcc, hvcc rules, realtors, lenders, appraisals, appraisers, mortgages, mortgage loans, loans, 100, 1st time buyers, brokers, banks, value, sellers, buyer

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79 Comments on Two EVIL words for Realtors & Lenders ALIKE to get to know..."Undue Influence"...IMPORTANT information on HVCC rules!

JUN

Meeting the appraiser at the property is just good business sense. The purpose is to provide the comps and explanation of how the list price was determined

Simple as that. This is not undue influence. This is simple seller representation. Why make an appraiser work in the dark?? It is entirely possible, since appraisers cover a very wide territory. They work very hard to complete 3-5 appraisals a day over a wide area to make a decent living. Their CE requirements make the CE that we real estate folks have to complete a cake walk.

The least we can do for our sellers is provide the appraiser with the information we used to get where we got.

If agents are going to be obnoxious and try to use undue influence, they will simple harm the position of their seller.

Darin--I found this post very interesting as I rarely show up for an appraisal unless the appraiser doesn't have an electronic key and needs to be let into the home. On occassion an appraiser will call and ask what I used for comps but that is very few and far between...usually only when it is an unusual property. I figure the appraisers know what they are doing and I let them do their jobs....Guess I thought everyone did that. I learned something today. Thanks for the interesting post.

Darin ... Interesting post and article about the US Govt. Home Valuation Code of Conduct ~ as relates to HUD and US govt guaranteed loans ~ with focus on UNDUE INFLUENCE as described there.

Even with possible disagreement, we as REALTORS and real estate professionals know that it's important to pay careful attention, follow these rules, and encourage lenders to do likewise.

I feel that agents are obligated to meet with appraisers and provide any information that may be helpful. Appraisers are not dumb. They will not be unduly influenced by what an agent says. However, they may agree with the information provided. Appraisers have difficult assignments and if agents can make the job a little easier, we will all come out ahead professionally. Our clients have too much at stake for us not to do all that we can to assist them.

Follow me on Twitter: http://twitter.com/roykelley

Great job Darrin! I like how you explained it. Very clear.

Lenn- I AM SO GLAD you were the first person in! Thank you! I DO AGREE this is NOT undue influence..what YOU are talking about! When I did this blog, I TOOK ALOT of time to gather fact and not just insert MY OPINION!!! That said, here is what I SURMISED about their atttitudes on the subject.. What YOU explain in your retort is what they would describe as YOU justifying the price the property is being sold at or listed at to YOUR seller! Apparently, they ASSUME most REALTORS dont have a clue!!! (yes, that was sarcastic)...

Even here in Wisconsin, as little as 4 years ago, we had REALTORS battling over listings....What THEY would do, is tell EACH seller..."I can sell it for more money that she/he can"....and then get the listing! pump it up 5k...and then sell it at the same exact amount later, because the LISTING PRICE was over inflated!

In other words, they DONT CARE HOW you came up with the price you listed the property at! If you are justifying it to the appraiser while they are there...they are now saying you are trying to INFLUENCE their decision! Sadly, not everyone works like you Lenn, ethically, and trying to be helpful! And, at the same time, holding a high level of service to your seller! Many are worried in advance, whether it be due to condition, or the declining market, and think the APPRAISER is not going to notice! These are the ones that give GOOD REALTORS a bad name!

"If agents are going to be obnoxious and try to use undue influence, they will simply harm the position of their seller. "

Lenn, you could not have been more right about this! Folks, listen to what she is saying!

I dont like to say this very often...but today I am...

I am WARNING YOU, that if you dont heed this comment and this blog, you will start creating problems for your lenders, your sellers, and might even find yourself out of a job! It is being taken THAT SERIOUSLY!

Thanks again Lenn!

D-Man, you are on a research binge!

Great work and congrats on the well deserved feature. Nothing to do with HVCC makes any sense at all, it's only another attempt to legislate morality. No surprise if they roll in Realtors as well and I agree with you that it's likely coming.

Mark my words- conventional lending will be taking an enormous hit from the advent of HVCC. Within 2 more months I predict FHA will by far be the most used loan program. Maybe in the end that's what the powers to be want, eh?

Gerry Suarez, Jr.

Your FHA Loan Pro!

Teri- Thank you for sharing! Because you have not commented before, you might not have seen my most coveted award I give out....and today, YOU ARE the winner of the COVETED Hooray for you!

Why did you win this you ask?? Well, because..

"I figure the appraisers know what they are doing and I let them do their jobs....Guess I thought everyone did that."

Great comment! I am confident the HVCC would love to have that qoute!....also, appraisers LIKE dealing with people like you!

Bottom line, I actually heard from my pal Mike in Tucson yesterday and we talked about this issue...he went on to tell me that one of his Realtor Contacts who was the LISTING AGENT on the property was CALLED by the HVCC APPRAISER, needing HELP getting COMPS, because they didn't have a membership to the local MLS! Isnt that pathetic?? Why is that person allowed to do appraisals? THEY SHOULD NOT BE!!!! PERIOD!

Thanks SO Much for visiting and please come back!

Darin

Darin,

This a true story that happened about a week ago. An appraiser to to a waterfront home to do an appraisal. The owner is home and they strike up a conversation.The appraiser tells the home owner there are only 30 some odd waterfront homes on the market! BS.. The appraiser then tells the home owner (who's home was listed well north of 1 million dollars) that there are no other homes in the county listed above $850,000.! BS.........there are many, many homes above that number. I had showed a property the day before that was listed at $3,900,999.!!!!!! What is this guy smoking????? Appraiser that do NOT have a good working knowledge of the type property they are sent ourt on should refuse the job. A Realtor is not allowed to do a CMA on property types they do not know...why is an appraiser allowed??? That is why we , as Lenn points out< show up with Comps t protect our clients position. No legislation can give someone COMMON SENSE or the ability to do work that they are not capable or competent to do!!!!!!!!!!!!!

Providing comps for an appraiser is the listing agent's job.

The buyer's agents' jobs may be helped by providing comps to the listing agents to explain a low offer

I actually had one agent, after looking at the comps on which we relied on writing an offer tell his seller that he had overpriced the property and explained the comps. We got the contract at a good price.

That was an honest agent. I don't see any thing that precludes listing agents from providing comps to the appraiser.

Bye.

Hi Darin,

As an appraiser, I have no problem with an agent providing comparables they think are relevant. I am still required to do my own research and come to my own conclusions, so accepting a "comps package" from the listing agent is just being thorough, in my opinion. Where realtors need to draw the line is with comments pertaining to the value:

"This house is easily worth $240,000, and these comps prove it!"

"Will you let me know if your value comes in less than the sales price before you send it in?"

"The buyer is not able to come up with any more cash up front, so this has to make value!"

(btw, I hear this stuff all the time)

So I agree with Roy that it makes good business sense for both the realtor and appraiser to accept any additional information available. Some realtors will make up a list of the improvements to the home and the dates the work was done, evidence of energy efficient items, and other things that maybe some appraisers (working for AMC fees) might overlook. I always say that the more info, the better.

However, realtors also need to be reasonable. If you just printed out the 3 highest sales in the neighborhood when your house is no where near that nice, you are just wasting printer ink. I've found that this is pretty rare, though. The realtors that provide information and comps are usually the "stars" in the local market that are doing a thorough job.

Final comment -- I am not a big fan of the realtor meeting me at the property. Having anyone following you around (or worse, talking to you) tends to make it difficult to see everything, measure correctly, etc. But I am happy to take emailed comps, notes, or phone calls. And if I have any questions about the property, or am concerned about my value vs. the asking price, I will always contact the agent to better understand the logic involved.

Harrison- GREAT to see you commenting here! I appreciate it! Thanks for the additional link to the rules in your response too! You know, we need to have opinions on this..we need to sign the petition to get rid of it, and we need to take action! PRESS THE NAR, and we will press the NAMB! Keep up the good work! Remain ethical, honest, and always think about your integrity FIRST, and you and others will get through this! Thanks again! - Darin

Roy- AS always, a great thing to add here! THEY LIKE HEARING THEY ARE NOT DUMB, because appraisers are constantly treated like THEY ARE DUMB! I SLIGHTLY disagree with you ONLY in 1 aspect...Take an area like....>> Las Vegas, where a listing agent who has had a property listed at 355k for 9 months, receives an offer for 290k, in a neighborhood that DURING the listing time, has not had a sale over 235k. THE HVCC is concerned that the appraiser would "unduly influence" by pressuring them with comps, NOT JUST TO SUPPORT THE SELLER and the PRICE they listed the property at, but in their eyes, they are concerned that the REALTOR would only be out for their large commission check! If you notice, they mention the word COMMISSION over 22 times in the rules! Hmmm....When I say I disagree with you, it is only from the standpoint of playing devils advocate! Keep up the great work! YOUR comments are always appreciated! - Darin

Darin,

I was so worked up I did not do a spell check....Sorry for that but I do stand by my position. It is our job to make sure our client gets the best and most accurate appraisal possible.

Tammie- Thanks! Great to see you again! Saw your comment on the HARP blog too! Were you in on that long call today?? Just curious! Take care, and glad you got something out of it!

Gerry - THANK YOU for commenting! I know you are involved in fighting these appraisal issues, and your knowledge is especially important being that you are in FLorida, which is CONSTANTLY mentioned as both a high foreclosure state, but also having the most potential for value growth! DUH!!!

There are SO few of good Lenders and Realtors LEFT in the business, I am not sure when enough isnt enough! I mean, do you think people are going to shop for a home at WALMART, and get the financing from WAL-Mortgage.com?? This is ridiculous! Keep getting the word out, and pass out the petition! Round table with BELONGER!!! - Thanks! D

Rich- I have a debifulator just in case! LOL PHENOMONAL POINTS! I live here in a LAKE AREA MYSELF! Had a similar issue..on a smaller dollar amoun tho...luckily! However, the appraiser that I worked with on it, was one of the ones I INTERVIEWED for this post! Her perspective was critical in my writing! YOUR CMA question is GREAT TOO! Just FYI- There is a CHALLENGE to the system and most 3rd party companies have something in place to CHALLENGE the value! Have your lender partner get a copy from the 3rd party APPRAISAL company, so you can specifically SEE what it takes to
"win over" a situation! Sadly, lake front, or view areas, have ALWAYS been a challenge, UNLESS the lake it 100 miles long!!!:) THEN you have distance problems! WHERE DOES IT END FOR PETES sake!

Thank you so much for sharing! -Darin...

THIS IS A VERY IMPORTANT ISSUE!!!

Lenn, Totally agree AGAIN with you! However, I AM SAYING ...that you WILL start hearing it! They are all saying it...because they are INTERPETING IT!!!!! EVERYONE is scared..so...errr...on the side of caution...Just for the record...THE AE I Interviewed was WF! I am sure, that OTHERS, just like SECTION 32, RESPA, discount points..etc...etc..etc...will INTERPET things A LITTLE DIFFERENTLY! JUST for your information, did you know that our Broker Fee Agreement..I have had explained to me, 5 differnt ways! One, accepts our State Document, 1 doesnt, one wants this, one wants that...etc..

Stinks! It is interpetation of a RULE. All i am saying, is be careful! A person such as yourself, has NOTHING to worry about!!- D

My guess is that I am the one who's featured post inspired this??

Anyway, I'm glad to see that it turns out that providing the appraiser with comps and meeting them at the property is legitimate business sense as I had mentioned in my post.

Now hounding an appraiser, that's a differrent story. That's just borderline stupid, let alone undue influence.

The bottom line is, the appraiser will do their own job with or without your comps, so just provide them, answer any questions THEY may ask YOU, and that's all you can do.

But it's best to still meet them at the property just in case they are not familiar with the area and need some questions answered.

Mike Lay- I had HOPED an appraiser would chime in right away...Thank you! GREAT comments, and while it supports some of the things that my "head honcho guy" confirmed, it also illlustrates the mutual respect that LENN talks about in her first comments about CE etc..etc.. And, it is nice to hear that there are things that YOU dont like too!

This quote says it all:

"The realtors that provide information and comps are usually the "stars" in the local market that are doing a thorough job. "

Well put! Thanks SO MUCH for sharing!

Darin

Rich- I got ya! !

No worries about spell check! I could care less...as evidence by the fact that I DONT run spell check! I get too excited and want to type too bloody fast! LOL

The knee jerk reactions to the housing industry's problems are hurting us worse

Ralph- Actually, you were NOT the person who inspired the post...That person knows who they are...as I had commented on their post..and told them I WOULD do my research...as Gerry mentioned above...I try not to formulate an opinion, until I thoroughly research it! Anymore, if we dont wait at least a little while..it will change too damn quick!!!

Great points Ralph though and I DID read your blog btw- It is clear by the COMMENTORS already on here, that we have quite a few concerned but QUALITY people..that WANT to do business the right way...but are hampered by the minority that do not!!!- Thanks so much for your input!! Keep bloggin and vist often please ! - Buckster! .,....err...Darin! LOL

Tom B- YOU BET! YOu know, noone has mentioned this yet...but what gives ANYONE the right to think that a REALTOR or an APPRAISER is more honest than a lender?? That is crazy! It's kind like those BAD managers we have all had...you know the type...the REACTIONARY managers! They are like people who dont get their teeth cleaned and then bitch about cavaties!

Thanks dude! GO BEARS!

Great post Darin. We all know that there are good Realtors, Mortgage Consultants and Appraisers. The good ones don't need help doing their job properly but the bad ones do. I think the consensus is to go the extra mile and provide the comps to be helpful. As a lender, I would feel better knowing that the listing agent is actually trying to provide the appraiser with some helpful information. I agree that there is a limit to how far they should go.

Wow. What about the out of town appraisers that call ME and ask ME to send them comps?

The free exchange of information between Realtors and appraisers is critical to establishing and maintaining a reliable database of home sales to be used to establish values for real estate. I am regularly contacted by appraisers asking about details of a sale and am glad to help them obtain the most current and correct information possible about our marketplace. Shutting down the lines of communication between appraisers and Realtors is a bad idea for the consumer and for the industry at large. Banks are worried about us manipulating appraisers? Please! Lenders have controlled appraisers throught the lightly-veiled threat of bringing in an appraisal that the lender likes or, NO MORE WORK! Gimmee a break, will you?

David- Thanks for sharing! ONLY THING I have to say to what YOU said, is WHY should we help anyone that is bad! Let's get rid of them! LOL...seriously, coaching, training, mentoring, teaching moments..etc...are not what experienced people need in THIS enviroment! We have enough troubles already! You are right...the good ones...know!! lets learn from them! Take care- and THANK YOU for the kind words!!!!- I agree, going the EXTRA mile is always good advice!

Erica- Meet them in a public place, and put them over your knee and SPANK them for asking! Or, public flogging is good! ...seriously, the one word that comes to mind..is pathetic!!! Thanks as ALWAYS for sharing! - D

Dennis- Werent you the coach of the Seattle, Seahawks one time?? You know, many people in our industry are just as qualified to do what we do, as COACH a football team....seriously though...many are NOT! What you are describing in your comments, are the beginning to a new form of anymosity that I had not thought of before! I can see it now...a call comes INTO your office like you are describing, and you say...."Sorry can't help ya! Here's an idea, join the mls you moron!"....I know, you wouldnt say that!!! LOL...I agree with you, see your point, and point well taken! There you have it! I love REMAX btw! big presence here in Wisconsin! Your points make MY point, that if they are ALREADY saying it behind closed doors, it wont take LONG for them to put it into print! Thanks..and please visit often! Your comments are appreciated! - D

Yep. Pathetic. Ususally they say, "I have to drive an hour to do this appraisal so can you help me pull comps and run to the courthouse for some data for me?"

Erica- One thing I had NOT thought about till your 2nd comment, was that NOT all courthouses, as well as SOME COUNTIES are YET...(and I know people will think we are hicks) to be computerized! here in Wisconsin, and especially up north, some of the county courthouses are still on APPLE II computers..from the 80's, or even LEDGER cards! ONE MORE REASON to have a local "boy" do it! wait, that was sexist...sorry! :(

The other thing here is that NOONE has offered an opinion YET on the effect this will have on their BNI group, and/or sphere of influence!!! interesting thought isnt it?? - Thanks! D

Oh yeah, welcome to the COAL REGION, buddy. Rural Penna. We just got property record cards online a few years ago. Maps and deeds are not digitized yet. Ha!

Dennis is right. An appraiser called me today to ask about a sale I had 2 months ago. Trying to use it as a comp and they had a few questions.

I could have ignored the request for detailed info, but I gave it freely to help the guy. May never hear from him again, but so what?

Oh, and I fogot...dont leave out KARMA! Always good to be good! .....LOL

Thanks! D

I agree with Lenn in the fact that It's my responsibility to meet the appraiser and provide comps. Always have and always will but I have never said one word to them about what was needed to bring it in. Lately we have been getting appraisers from out of the area and many do not belong to our MLS so they need the comps I provide.

Appraisers can usually look up comps and sales on county/title websites. Providing comps from an MLS that is closed like our is, can give them further information on the properties. We also KNOW the houses, since it is 9/10 times that we've shown the homes, and the appraisers are just DRIVING BY and going on the sales and strict descriptions or non descriptions in the MLS, and square footages alone isn't going to help us! They need input, since they are appraising a home on it's condition and location and comparables. They are usually from out of the area and haven't seen the comparables. THESE RULES SUCK, AND THEY ARE ONLY DOING HARM. I am not unduly influencing someone when i've SEEN the inside of the comparable they're using and they value it higher than the one that they are appraising when I CAN PROVE the value is there.

Off box...

Cameron- BINGO! Seems to be the consensus amongst MANY of the quality RAINERS! you know, professionals have things in common don't they?? Good to know that you PUT THAT IN PRINT about NOT SAYING things about value! let me share one quick thing with you...

I started in Mortgages, 8/8/88 ...Day of 1st CUBS night game! remember it well!

That said, when we ordered appraisals on REFINANCES, (which in the end is what ALL OF THIS IS ABOUT)...not purchases....We would put in the COMMENTS SECTION of the order form, what the Customer thought the value was...NOT US! Why put a freaking comments section there right??

Well, 10 years ago...we were lectured ABOUT THAT>..so....in the COMMENTS SECTION we put a RANGE of what the CUSTOMER thought the value was...180k-190k..Trick used was...that EVERYONE KNEW the value needed was the lower NUMBER!

NOW, here we are today...and we can't say anything..

Okay, then I challange this...If ON A PURCHASE there is a HOME INSPECTION, that should satisfy the lender in terms of the quality of the purchase.. WHY do we need an appraisal at all then?? Seriously! Because, in the end, the underwriter is going to use the purchase price, or APPRAISED VALUE whichever is less! Of course, I am speaking tongue & cheek! NOW that we have declining markets, I DO understand..but prior to that?? did it make sense?? Next thing you know, our Socialism Swinging Government will be telling us what homes are worth?? YOu laugh...but im saying!...

Thanks Cameron...and please visit again! -Bucky

Oh I get it (new hvcc). Right wrong or indifferent I like to follow rules and prefer not to kill my own deals. I won't even ask for an appraisal review unless we have exhausted all options and feel like the deal is pretty much dead because of the appraisal anyways! Just cuz we can't talk to them doesn't mean I agree with them all the time!

Just for you Amy!

This is a very frustrating topic! So far, I think this blog thread should be included with the petition to get rid of the HVCC rules! have you signe it yet??

Couldnt agree more with you!

This quote by YOU says it all:

"I am not unduly influencing someone when i've SEEN the inside of the comparable they're using and they value it higher than the one that they are appraising when I CAN PROVE the value is there."

I appreciate your sharing VERY much! please visit again!- Your pal - Buckster

RENEE- I am GLAD to see you !!! I was hoping this blog of all people, would attract YOU to comment...because I KNOW about your appraisal/HVCC struggles...and your frustrations within this poor system! I AGREE WITH YOU and hope YOU signed the petition to get rid of this STUPID system! There are MANY professionals such as yourself that have HIGH HIGH levels of frustration! Just today, I fought an appraisal that was 4k below a sale price...4000 bucks is all! I will not win! What I had to do though...was FIGHT IT because the REALTOR had called this particular appraiser....10 x...and left messages! WOW!>....I am fighting to keep from taking it to another lender, because RATES WENT UP!!! Argghh...double arghh..

Oh, and did you get my email I sent you?? I NEED a lender referral in Las Vegas....Do you have a go to person there?? I have a friend who needs to refi under the new HARP plan! Thanks again..and you are welcome to comment as MUCH AS POSSIBLE! - Thanks! Bucky!

I think it's very interesting that there happens to be a list of names of agents that are - for lack of a better term, meddling - and therefore banks won't touch loans where those agents are buyer's agents...

Christianne- Yep...kinda sounds like BIG BROTHA..or BIG SISTA!!! Many AGENTS didnt know this...so I am hoping that if MY little BLOG helps ONE person, keep ONE deal ...it was worth it! It is very clear ALREADY this is a challenge to the Realtors responsibilites! I am not...but HVCC, and the rules do! This makes people angry,and beyond frustrated! We are all just trying to make an honest living, and provide quality service! When stupid things, or stupid people get in our way...the natural thing to do is "MOVE THEM OUT OF THE WAY....well, you can...at least try...

Sign the petition...complain to your BOARD...and get involved in local government! It isclear this is hurting..not helping! - Thank you as always! - D

Darin, I read your blog but only read Lenn's comment and I agree with her. I did a blog on this when the HVCC rules were first announced. The target of these rules were Lenders, Loan Officers, and Brokers, and very little applies to Realtors. The people that put the HVCC together in my opinion didn't know much about the Real Estate Business, because there are many things in the HVCC rules that contradict each other and you provided a good example of this in quoting Section 1 Sub-section B #5, and Section IV Sub-section B #4. One of the things that an Appraiser requires when he/she does an appraisal on purchase is a copy of the Sales Contract, and what does that Sales Contract have right on the front page for everyone to see, the Sales Price. So what good does it do to tell the Lender not to put the Sales Price on the Appraisal Order, it the Appraiser is going to be seeing it on the Sales Contract that the Lender is required to send along with the Appraisal Order. Makes a lot of sense right.

It has been a while since I read the HVCC rules, but I don't remember reading any thing in the HVCC that prohibits the Realtor from talking or even giving Comps to the Appraiser. Also how would Wells Fargo know that a Realtor placed undo influence on an Appraiser that did an appraisal on a loan that was being sold to them.

Also the HVCC only applies to conventional loans, FHA has not adopted it and has not indicated that they will. The HVCC does not make any sense in my opinion because it will only affect the honest Lenders, and do nothing to stop the crooks.

Sorry for the long comment, but the HVCC is just another step in the wrong direction in my opinion, and another excuse to pretend something is being done instead of just enforcing the rules that were already in place.

George- let me LAY it out for ya!

I broker to Wells. I order the appraisal through RES DIRECT. RES DIRECT uses LSI, or RELS for their appraisal. On the RES DIRECT order we put contact information. Appraiser goes there, listing agent gets their name & card. REALTOR CALLS the appraiser 400 times...Well, the appraiser sends a REPORT along With the Appraiser to RELS. Rels gets a daily UNDUE influence report, they send the information on to Wells, Wells turns the loan down for "undue influence". Okay..that's done.

To answer the rest of your comments...NOWHERE does it say REALTOR, but in about 7 spots it says AGENT...they are assuming that means REALESTATE agent! The Quote i put in there, is directly from a WF AE!

It also never says COMPS...but uses other words .....It also mentions CONTRACT< purchase contract et....WHO CARES what the rules say?? LOL ....What I am talking about in this blog, and the comments is INTERPETATION! ....

Bottom line, YOU WILL HEAR THESE WORDS MORE AND MORE! One day, you will send me an email and say....Bucky, you were right! :)

Thanks so much George! your experience is appreciated! - Darin

Darin, appraisers need to be independent in their work and stay away from lenders AND agents.

Darin... basically a very good reason to why I even love FHA loans more. And it's not to take borrowers the FHA way just because of this. But because most of my clients get a better deal with a FHA loan than a conventional loan. People need to understand, even if you are putting 20% down, FHA could still be the better loan. It all comes down to credit scores.

Overall, the gov't is going to make things harder because of this crap. Yes, there were those loan officers and lenders that ruined it for so many, because they forced the appraisers hand to play with value. But again, the appraiser didn't have to do it either. So who is to really blame in that area?

In any case, nice job here... I am just sitting back, watching and waiting. Again, because of my different markets, most of my business are FHA loans. But my opinion, there should be no problem with a realtor giving comps to an appraiser. If those properties fit the scenario, no harm, no foul. Again, this should all come down to the appraiser doing their job. thanks

jeff belonger

It is always a great idea to meet the appraiser. In our area there are a couple appraisers who show early and if the home is vacant, they only want to give a time frame.. maybe they will show during this time.

Not saying all are like this.. but there are a couple.

Darin, I say, "huh". Again, "huh". There are so many twists and turns in this change of government and economy and life we are living. So, let me raise my bar and say, "huh".

Deb

Darin--I am so honored...I love Elmo. :) Thank You!

Darin- well, well, another interesting topic for sure. As a listing agent I always meet an appraiser at the property even when they say they have their own lockbox key. It is policy on my part and as Lenn says, part of what I do in representing a Seller. I also have a sealed package for them with a brochure of the property, a list of any and all improvements, copy of the contract and comps used when I listed the property. Interesting enough I have never had an appraiser resent me being there though not all have been over friendly. LOL

The interpretation of the word 'agent' in the rules is interesting as well. Though I have never looked at it as meaning me I can see where it is better to be safe than sorry when it comes to it's true meaning.

As an agent, my bottom line is to list the property right from the get go and not be swayed to do otherwise. And once listed I check comps weekly if need be. In a declining market, or even one that is starting to stabilize somewhat, prices change quickly so its important I stay on top of those changes. And the last thing I do is when I receive an offer is check comps once again to see where this offer places us in the mix.

I learned this lesson the hard way and believe me I will NOT forget it.

Thank you for posting a link to the specific rules. I agree we need to make sure we know them whether we like them or not.

As a broker, realtor and former appraiser, I think agents can shoot themselves in the foot sometimes if they provide comps and their comps (regardless whether they support the price or not) don't sync with what the appraiser thinks, it may sometimes add complexity to a process that isn't there. There is a human element to professionalism as well and since a listing agent doesn't know the appraiser, an individual appraiser may take offense at a listing agent "meddling" with their task, regardless if a listing agent thinks they are helping.

In short, tread lightly as there are many variables that are outside the direct knowledge and control of the listing agent, and one may find themselves hurting instead of helping, regardless of intention.

Gary W- Thanks for commenting!!! You are right! Maybe if there is a lockbox, the appraiser could just AVOID telling everyone when he goes, and when it shows up it shows up! Oh, and maybe ILl find a pot-o-gold somewhere....and go to MASCOT SCHOOL! LOL...This IS ridiculous!!! Mutual avoidance then?? LOL...Darin

Jeff B- Sadly, you are correct! I dont think alot people realize that the conventional loan is going the way of the do-doh...! What's its called when the government owns everything, runs everything and controls everything?? oh yeah..communism....Isn't that just a click past SOCIALISM?? If I recall...that is correct! LOL....I THINK THESE HVCC rules have to be repealed...or at least left up to lender overlays...and allowing FUNDERS to choose if they are going to go this route or not! Thanks Jeff! Darin

Darin,

Thanks for your call this afternoon, and congratulations on another featured post! My appraisal came in today on one particular rate and term refinance. Conventional conforming. The owner expected 420,000. The appraiser saw it as $340,000. The underwriter ripped the appraisal apart and said $290,000 tops, and referred it to their corporate office for a second review.

You just never know. The expected LTV went from <60% to >60%, and now may approach 80%. Beauty is in the eye of the beholder. Over 80, and we're going FHA.

Mike in Tucson

Roland- If only you can get them THERE on time..?? LOL...kinda like the cable company huh?? - My regular appraiser only is there on TIME because she is my regular appraiser! She has faith & trust in me...like I do in her! NOT BECAUSE she leaves things OUT....because of the things she DOESNT DO for OUR customers...Like CHARGE THEM if she goes out, sees the house...knows its a no...and doesnt do the appraisal, or CALLS Me from the yard! THAT IS SOMETHING THAT WAS good!....HVCC has killed it! Realtors HAVE to be careful NOT to let their personal feelings enter in..and just make SOUND business comments and decisions! THANKS AGAIN! - Darin

Deb- aka; Lake Livingston...HUH?? ALright..just kidding! They are acting before even attempting to think! Some action, if done too quickly without thought, has such a LONG TERM REACTION, that the actual turn of events has not even been given a chance to unfold! There you go...another...say it with me now...HUH?? LOL- Thanks! Darin

Teri- YOU are very welcome!

Martha- You are also very welcome..and from the sounds of things, you are what I call a "super agent"! seriously!... You know what is funny to me...?? Well, ill tell ya...Sooo many people immediately get defensive, and take a side RIGHT AWAY!!!! The point of this blog was to show myself and others..THAT IS NOT A GOOD IDEA! I investigated QUITE ALOT and took ALOT of time to make calls, send emails, wait on hold etc...BECAUSE FOLKS THIS IS IMPORTANT! Martha, it is good to see that you take the approach that isnt defensive and can see WHERE someone would interpet "agent" as a Realtor...Agreeing or not..it is being done! Eventually the word REALTOR..(okay, sorry the NOUN)....will be added I am CONFIDENT of that! The sooner we get used to it the better! Keep up the excellent work! Thanks for commenting, as you know, I appreciate it@ Darin

Christine- You officially get the "hit the nail on the head" award!~ LOL...Your welcome! ...I appreciate your comments! I would love to see your comments after you read them! ...so please, come back! Thanks! - Darin

Chris O- A GREAT perspective here folks! He sees it from all sides! That is very unique today! If anything, we ALL have to check our egos at the door..and sometimes, even when we KNOW we are right..deep down inside...ultimately, we have to weigh the fact or question, which wasy is more difficult, and makes it harder ON THE CUSTOMER! Let's not make a big deal out of it..and just DEAL WITH IT! I dont have kids, but I know that when my NEPHEWS fall down hard...they ONLY cry if I MAKE a big deal out of it! If I laugh...they tend to "roll with it"! Thanks Chris as always! - Darin

Mike- MAN that is a BIG BIG difference!!! GOOD LUCK WITH THAT! What happens with your LOCK at your company when that occurs?? Do you go to LOCKED day pricing, or current??? Let me get THIS straight...THE UNDERWRITER ...ripped the HVCC appraisal apart?? HOLY COW!!!! That's a new one for me! That's a couple of new ones now for me, just in the last 2 weeks talking to you!!! LOL

I was happy to call, and appreciate your experiences! WOW BIG ADJUSTER HITTING TOO! OUCH!

As they say...Good Luck with that! :)

Thanks for stopping by! Hope you got something out of this! D

JUN

Darin.... in regards to your comment, I don't think this is true socialism, but just gov't intervening, trying to make a change for the better, yet it can and will backfire.

Questions to you....

by implementing the HVCC, how is that communism or socialism?
What does the gov't gain by doing and enforcing the HVCC?

By not allowing the borrower to choose between a conventional loan and or other loans, sure, their choices become scarce. If they make too much money, the only program left usually is FHA. But FHA loans are bought by private investors.

Sure, FHA loans are insured by a gov't agency and is a federal assisted mortgage program. But the overall picture is that it's controlled by those investors that sell & buy Ginnie Mae pools.

In any case, just food for thought, because I was trying to follow where your comment was going. Overall, I just think it's the gov't just making a poor decision, and not having anything really to do with money or profit. Communism and or socialism to me is when the gov't controls something for greed, profit, and or power... that is my opinion.

But getting back to your topic... it's just the gov't trying to make a situation better, in their minds, yet it will backfire in some ways. This was something that should have been looked at 10 years ago, when lenders and appraisers were abusing the system. But the gov't had to wait until the market crashed... sad..

jeff belonger

Darin, you write such great content and very informative. thanks so much and keep it up !!

Wow--lots of great back and forth on this one. I'm enjoying reading!

I am also in the middle of taking appraiser classes, and loving the opinions.

My view of agents providing the appraiser with comparable sales is that it can't hurt. The opinion of value on a particular property will be mine and mine alone, so anything an agent provides will be considered within that context.

I have had many cases where I met an agent at a property who had the provided the same potential comparable sales as I had selected, with perhaps one or two I may have considered but rejected for various reasons, or even one I may have missed (I am a fallible human being, after all).

I have also had a few cases where I met an agent at a property who provided only the highest sales in the area which were obviously NOT comparable to the subject.

As long as the agent simply provides data for me to consider, and does not engage in any conduct which could be construed as coercive, in my opinion no violation has occurred.

My point is that simply providing data to an appraiser is not (in my opinion) undue influence, but can become undue influence when coupled with inappropriate comments such as those stated by my colleague Mike Lay above.

Darin: Why is a Realtor meeting with an appraiser armed with comps any different from a loan officer ordering an appraisal and discussing comps?

It seems to me if the problem is conflict of interest, then a Realtor has just as much "interest" in getting the right appraisal as a loan officer. Why isn't this considered to be a CONFLICT?

Frankly, although I am not in favor of HVCC (because it harms consumers) I have to say this: It almost seems like the appraisal monkey jumped off the back or mortgage people and landed squarely on the back of Realtors.

Now they are the ones that may be accused of UNDUE INFLUENCE. And yet who could be more knowlegable about pricing than the listing agent????

I WANT the listing agent to be involved. They SHOULD be able to make a case for the price that the house sold for. That is adding supporting facts from an expert, not undue influence.

@Janet.. I will semi disagree with your last statement. In more than a few cases does the listing agent list the house correctly. Remember, they are sales people also. In some cases, they want the deal so bad, that they will list it for what the seller wants the price to be, to sell at. And in some of these cases, it's not even close. I have one right now, that is listed for over $40,000 of the real value. The appraiser spoke to the realtor about this and she even knew this. It's what the seller wanted to sell it at. So not all can make a case, but sometimes a case that they want it to sell at, because they want to make the seller happy. Just my .02.

jeff belonger

I recently had to write a rebuttal to a review appraiser who cut a significant amount of value on a property. This was an FHA loan, so no HVCC rules. Also, the transaction was a FSBO and i was unable to talk to the initial appraiser to provide a rebuttal, which is obviously the normal procedure in cases like this.

Long story short, the appraiser made a major error on calculating lot size (both appraisers did, actually). The review appraiser applied a significant adjustment for small lot size to the subject, but as it turns out, both appraisers were using tax appraisal lot dimensions. The lot was irregular and SIGNIFICANTLY larger than shown on both appraisers. In fact, it was more than twice as large as all lots of every comp listed in both appraisals. Plus there were some other errors, but none this significant. The seller and I both worked for hours reviewing comps. In the end, the value was raised several thousand dollars (below original sales price) and the transaction closed.

My point of this story is three things: 1) people make mistakes 2) the situation was resolved by pointing out the incorrect FACTUAL DATA and 3) I submitted my rebuttal in writing, i didn't meet the reviewer or talk to him in person. The lender actually told me that i would not be able to send a rebuttal, but i finally persuaded an underwriter to forward my email with a promise that i would NOT CALL HIM. And since i just pointed out facts, he quickly changed his opinion of value and we moved on. So I have absolutely no worries that anything i said could be interpreted as coercive. And if they ever tried to come back on me, i can back everything up because they are all facts that can be documented. There was no subjective conversation or dialogue, it was one-way communication. I was extremely careful not to talk down to the appraiser (after all, everyone makes mistakes).

I agree with Lenn Harley and others that showing comps to the appraiser is both good client representation AND can be extremely helpful to the appraiser. BUT you have to be careful about how a conversation could be INTERPRETED by the appraiser. Most successful realtors i know are very headstrong, and they can come across as intimidating EVEN THOUGH they aren't trying to be. Good salespeople are often like that naturally and can't help it.

After reading this blog and knowing that lenders are keeping a list (a.k.a. BLACKBALLING) realtors for talking to appraisers should be a warning to everyone to watch what you say. In lieu of having a conversation with the appraiser about the comp values, providing a list of comps ALONG WITH a WRITTEN EXPLANATION of facts that helped you determine value might be a better and safer alternative than talking to them. I'm not saying don't meet them in person, but having a conversation might be something you want to think twice about. Simply handing them an envelope with your comps and letter might be a better call. After all, if there's a dispute about what was said, whose side do you think a lender will take? The bottom line is that many lenders DON'T CARE.

Lenders have blackballed all kinds of people in the past, often for good reason s, but also for reasons that never made any sense. So it's no surprise to me that realtors may be the next group to have to deal with this.

Unfortunately I think that mistakes and poor research in general may become a lot more common on appraisals ordered via the HVCC process. Why? Because of how it's affecting many of the appraisers in general. I lost count of the conversations i've had with appraisers about how management companies sit on orders for three weeks and then call and expect them to drive 80 miles and turn over an appraisal in 24 hours (all the while keeping HALF of the appraisal fee). Those conditions aren't conducive to performing good quality work. Believe me, they are all really happy about taking 50% pay cuts and losing a large part of the control over their business. Can anyone here see how that might affect an appraiser's ability to perform good quality work? With that in mind, it may be even more important for realtors to provide this information. And unfortunately it appears that may become very risky.

It's too bad things have come to this. There does need to be a level of seperation between appraisers and production staff, but there are a million ways this process could have been done differently that would have made more sense. VA has an appraisal ordering process that seems to have worked well for years and i have no idea why something similar to that process could not have been done in place of this cluster of a system.

Whew! Now this is a must read post for all of us - it's our Stay Out of Jail card!

Hi Jeff,

I think I can answer some of where you are going by giving you a definition of SOCIALISM from dictionary .com...I KNOW you could look it up..but just CHECK out the wording...

"(in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles."

Doesn't this SOUND like what is happening right now?? SERIOUSLY !!! It is! Now, there is no time frame as to HOW long each stage lasts...LOL...but we are DEFINITELY headed toward Socialism!

Here is the 1st definition of Socialism....

"a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.

Jeff- I didnt intend to discuss politics...however, Government controlling banks, setting price controls, forcing people to take out a specific type of loan, coming out with HARP programs that benefit ONLY a small portion of the populace, and now not trusting lenders & actually FAVORING 3rd party systems that you and I BOTH KNOW have flaws as well,....all smacks of the growing socialistic trend in the US! Everytime I try to convince myself otherwise, i go back to the definitions! Its tough not to feel that way!

HVCC is ludicrous! UNDUE INFLUENCE is not an opinion,my opinion, nor did I make it up! It came STRAIGHT from the people's mouths that are involved with it every day! Just because one bank, one lender, one credit union, or ONE PART of the country hasnt heard of this or had to deal with it yet, only makes THIS BLOG that much MORE IMPORTANT!

"What does the gov't gain by doing and enforcing the HVCC?" GREAT QUESTION! I would say the Government gains nothing really, but the ADMINISTRATION does...Politics....at its purest form! THEY THINK they are helping, but who in the end are the hurting the most?? JUST LOOK AT MIKE IN TUSCON"S comment! THEY ARE HURTING THE VERY PERSON that matters most...The consumer!

Thanks J- D

Kristin- Im so glad you appreciate what I am doing! Thank you! I appreciate your comments and the fact that you take time out of your busy day...to read! thank you!- Darin

Erica- All of this will make you a much better appraiser, or Realtor, OR BOTH! The old saying, "it is better to beg for forgiveness, than ask for permission"...has to go out the window now I think!

Here's a better one: Dont let the door hit ya, where the good LORD split ya! :)

Thanks! - Darin

Jesse- I stand by what I was told, and put in the blog! Put all the information you want to provide, in a professional company folder. Answer questions about the house as the appraiser asks you..and leave it at that! THEN, it sound like all good! - Thank you for sharing your insights! - Darin

Janet- YOU ARE RIGHT! There is no difference! Much of what has been said is that LENDERS got "into bed" with appraisers, and pushed values! Hello!!! I think it is hard to push a PURCHASE value..dont you?? LOL...This was all done on REFINANCES! I had considered writing a blog about this...but I dont think ANY of this mess is due to SUBPRIME mortgages! You are probably going to think I am on "crack" right now...but I THINK, it was due to the availibility and EASE of getting HOMEEQUITY loans! Just ask any SHORT SALE driven Realtor! Almost all of the 2nd mortgages are getting eaten alive! Leaving only enough to pay the firsts! While I was working for a LARGE NATIONAL LENDER...we actually got a bonus on any Home equity loan sold to the customer, EVEN IF THEY DIDNT DRAW any money on it!!!!! Better yet, they had a streamline process, so if you didnt need an appraisal for the 1st mortgage refinance, you could do a 2nd at the APPLICATION VALUE up to 90% of what was on the findings report! ....in that case...WE DIDNT EVEN REALLY KNOW what the value was!! Who cares right?? is it the LO's fault>>?? Or, do you blame the company?? THE LO was just doing their job with the programs they had available! NO differnt than today! Just look at Jeff Belongers comments....pretty much, he only does FHA loans! He does all the others too..but he has chose to drive his business towards that product for a long time...He didnt KNEE JERK REACT, and all of a sudden start doing FHA loans!

Anyway, I have read the HVCC now, about 10 times...and it keeps getting back to the word COMMISSIONED , or anyone DERIVING a commission from the sale! (yes, I am paraphrasing)...That said, a listing agent has a commissioned interest to sell the home for the highest price, and best deal for their client! THE SELLER! That, is Capitalism folks! If they are taking that away, that is why I made the comment to JEFF about Socialism! ...again, hate the politics...but we have to get involved, we have to learn about this stuff...and we have to put safeguards in place to avoid these things from STINGING us! Hopefully, my blog will save just one person from downfall!

In the end, if a REALTOR(listing agent), causes undue influence, and the loan is rejected by the funder..THEY CAN go somewhere else...The issue as I SEE it ...what happens if rates go up?? What happens if there is a backup offer?? What happens if the SELLER was counting on the money to close on the purchase of another home?? Who is liable?? Well, if they are documenting this stuff, guess what...a WHOLE NEW SERIES of lawsuits are going to start flying around like picnic bugs in July!!!

Thanks!- Darin

Jeff B- You know, I think we all have exceptions to the rules in our back pocket..and that is all part of being EXPERIENCED! That is why consumers gravitate to people like us! It is JUST those experiences that make me personally ALOT MORE VALUABLE than the next guy or gal! How we learn from these things...is the biggest part! Experienced people TODAY, have to be willing to accept change, and be able to move past ego...and on to ergo!!! :) LOL In your example above, I am confident the REALTOR has a copy of her CMA to fall back on...so she would be safe!>>>>that is the I TOLD YOU SO...document! Thanks again! = Darin

John Jones- You know, all well said...Great examples cited too...Not sure I even NEED to comment! Really! Well done! Please come back and comment often..and never worry about LENGTH on my blogs...I have been VERBOSE on many occasion...Oh, and dont forget the classic other one..garrelous..>Not sure I can even spell that right!!! LOL...>Thanks so much for sharing! Great points! - Darin

PATRICIA- WELL SAID! You know, I hadnt thought of it that way..but yep, you are right! I was asked what the penalties are etc...good questions...Penalty is only to the consumer! OUR ACTIONS WILL AFFECT the consumers life! THAT IS WHY we have to be careful! if they turn the customers LOAN DOWN due to undue influence by ANYONE...we only lose a loan, you only lose a commission, but the buyer loses their dream home and the seller may not be able to BUY theirs! OUCH!@!

Thanks for sharing..and I appreciate the kind words!= Darin

I will Darin, thanks. (short and sweet this time LOL)

JUN

Darin.. here is my opinion... you are throwing in everything else that the gov't has done in recent months. I stepped away from that, not to allow it to influence my thought process, and to just pick apart the HVCC issue(s). You brought up everything else that has taken place, which I think is not fair nor related to this one issue.

As you even stated yourself, you said.. "What does the gov't gain by doing and enforcing the HVCC?" GREAT QUESTION! I would say the Government gains nothing really, but the ADMINISTRATION does...Politics....at its purest form!"

That was my whole point to your statements... how can you put this HVCC into the same category of communism and socialism. First off, you stated, "Jeff- I didnt intend to discuss politics...however...."

In my opinion, when you stated the words Socialism and communism, you yourself opened the door to politics. Yes, I don't like talking about politics either.... but you hit a key point. You said that you think the gov't thinks that they are helping... I agree with that statement and I agreed with your next statement. "but who are they really hurting, the consumer."

Again, I agree with that... but how can you relate this issue to communism and or socialism. Especially when you say to me... good question. And then say, the gov't gains nothing... ??? Doesn't that sound like a double standard?

Darin, overall, I agree that this is a mess, that it hurts the borrower and our industry. But I just chalk it up to stupid politics, politicians, who aren't using common sense... who are trying to make it look like they are doing something right, when this should have been seriously looked at and evaluated 10 years ago, when lenders & loan officers were abusing this back then... over-stating value and forcing appraisers to come in higher. But that those same appraisers should have been held responsible for the same reasons. I think this whole situation is a catch-22... not about the gov't trying to be communistic or socialistic. And I only brought those words up, because those were your own words, describing what is taking place. When in my own opinion, you were throwing this issue into the mix of the other issues that have taken place within our gov't. And I don't think this issue is related to the other issues that suggest socialism. I will agree that we are headed towards that issue of socialism, but not with this example of the HVCC. That was the point that I was trying to make. Thinking that this is a totally different issue, not related to anything but stupid gov't control, gov't regulation, that they are trying to make a wrong into a right.

jeff belonger

JUN

John- Been out of the loop for a few days! Sorry...Back here now! Thanks for visiting man..come back often!

Jeff- I partially disagree with you. First of all, the main focus of your business is FHA loans..and some USDA loans. Hence, you have not had to deal with the same level or number of related issues as compared to others. For that, I DO understand your position. However, taking one small part of what I said , out of ONE SMALL comment...and NOT the blog...really is splitting hairs,and is more you making it an issue than I did!

You turned the conversation Jeff unneccesarily when not ONE other person did...to politics! it is VERY easy to compare the two...but that was never the POINT of the blog, but yes, was mentioned for a fraction of a second in ONE of my many responses. I dont ever mind opening up any door, pandora or naught...

The question about the Government YOU raised..I did not..I only supplied my answer to your question. My answer, or response would be this....At what point isn't government control a step toward Socialism? At what point does it convert? Within which industry does it have to start or end?? Unfortunately, our industry is at the forefront of almost every other news story. Hence, GOVERNMENT control of loan programs, banks, appraisal requirements, affordability...etc...where does that end??

You know, in my career, I have seen 1000's of loans that should be have turned down due to the debt ratio NOT inclusing child care expenses, BUT, accepting child support as income...why dont we include car, health, dental insurance, elect, gas, cell phones, etc..etc..etc...etc...I wouldnt be surprised if the GOVERNMENT starts enforcing that...! Actually, they really have because of the lowered MAX debt ratio requirements...They are not CALLING It that...but that is what they are now considering into the lower ratios...Next thing I PREDICT you will start hearing MORE about... is an old item...called Margin Per Household Member! None of these items would be good for doing loans..but of course woudl increase the quality of the portfolio.

In addition, years ago..there was a philosphy engaged at the FINANCE company level..It was merely to OUTGROW your delinquency...control your first payment default rates, and do a good job of listening to customer issues/concerns when there is a problem...Especially at the beginning of a loan term!

HVCC is only a step in a bigger Ladder Jeff! It certainly isn't the start..but if people dont pay attention, it will be too late before they figure it out!!!!! Education through AR, and other sites from quality reputable people, and blogs such as this...are one way to aid in the understanding of "LACK of UNDERSTANDING" that poses one of the biggest threats to our industry!

I spend 2-3 hours per day..educating! Not selling, not marketing, not processing...but educating! I constantly have to UNDO what people have already done! As YODA SAID..."you must unlearn, what you have learned". (in a yoda voice)

IN my humble opinion 50% of the appraisers, should have lost their lisence...right away!

Thinking that an appraiser, or Realtor, is anymore honest, upfront, or forthcoming than a lender, and worse yet....DOESNT HAVE AN OWNERSHIP interest in the transaction , is proposterous!!

Point of this blog was to state fact, not fiction. People can think what they want...that is the point of forums like this...They can say things like, "they dont do things like that here out in Nevada, California, or in this part of the country"....but that to me, merely tells me THEIR lender partner is not on top of things or the changes! Typically, large companies such as Wells Fargo, get in FRONT of these issues before other people are forced to deal with them! Then, they are already griseled veterans in dealing with them!

HVCC rules stink..and it should be abolished! Your idea of a ROUNDTABLE discusssion, will hopefully come to fruition. Washington quite simply is acted to quickly on advice from people who dont have a clue!!

Darin

Darin, My biggest worry regarding this issue is appraisers coming from outside of the area to do appraisals. It's similar to a bank in Ohio telling me that several lots they own here are worth $100K+ each, when they will be lucky to get $40K for each of them. They are all the way across the country and have NO knowledge regarding the market here!

C-O-N-G-R-A-T-U-L-A-T-I-O-N-S-! on your featured post...most deserved!

Hey there Wanda- Thank you for commenting! I see YOUR worry as a very similar worry not just amongst Realtors, but also Lenders and EVEN CONSUMERS are getting into the act now!

I think part of being a professional IS KNOWING YOUR OWN MARKET! Kinda similar to out of state lenders actually lending in your community....ie: Ditech, etc..etc..JUST ASK ANY TITLE COMPANY what they think about that! Thanks for the kind words, and if I lived in UT...I would love to work with a quality Realtor such as yourself!!!

I considered THIS POST an extremely important one! I have another one coming out with some industry updates tomorrow!

Thanks again!

- D

I had no idea we weren't supposed to talk to appraisers about comps. Alot of the stuff I list, I'm required to accompany anyway so there's no way around that but thank GOD I didn't try to push comps in front of the appraiser I met last week. Thanks for the clarification. :)

Shannon, happy to do it!!! I took this BLOG very very seriously, and hope that the readers do too! it is truly no joke! You are fine! You did ALL the right things! Leave it at that..and you are good to go! Feel free to follow the links to the actuall HVCC code...It's only 4 pages..so wont take you TOO long to peruse! Thanks again! Take care, Darin

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Darin Osenberg

Nashville, TN

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Market Nashville

Address: krovy@aol.com, Nashville, Tn, 37211

Cell Phone: (919) 306-5731

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