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My take on HVCC so far

Hello all: I hope you're well! We're in day 51 of the new Home Valuation Code of Conduct (HVCC) and I thought I'd comment on what I've seen. From an appraisal standpoint, there really haven't been any issues. In fact, we just got a report back within a week. Granted, it's for a purchase that needs to close by July 10 but I was surprised nonetheless. The appraisal ordered before that took quite a while but that was due more to the borrower's busy schedule. Once the appraisal was done, the report was quick.

I have to admit I didn't know how the new HVCC law would play out. And I did sign the petition; mainly because I really like the two appraisers I work with. They both seem to be hanging in there even though they're not on our company's approved list. I'm seeing if it might be possible to have them added.

My conclusion? Things haven't been quite as bad as I thought they might. Either way, I'm committed to this business and told my appraisers we would adjust to this as well. So what are your experiences? Perhaps I'm the proverbially glass half full person. I welcome you to weigh in. We've had so many challenges the last few years and I honestly feel as if we're about ready to turn the corner. Have a great day!

Paul McFadden

Posted by Paul McFadden Mortgage Loan Officer Bellevue Washington Home Loans on 06/22/2009 03:59 PM

Comments (8)

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8 Comments on My take on HVCC so far

JUN

Hi Paul,

Thanks for sharing this! People blew the HVCC thing out of the water...I believe we should give everything a chance before we criticize it, but professionals jumped all over this one.

Thanks for keeping us informed!

Sincerely,

Kathleen

Kathleen: You're welcome! I guess some people don't do well with change. I remember when everyone had to move offices here shortly after the first of the year. Management does this just to shake things up. You'd have thought the world ended! Take care.

Hi Paul,

I think the HVCC issue is complicated. I like the idea of being isolated from the appraisers, but the current incarnation may have taken away too much of the accountability of appraisers to their "customers". Unfortunately I don't have a better answer. I'll have to sit back and watch it play out for a while.

JUN

Kevin: Thanks! Things always go overboard and then adjust back. I expect tweaks to the HVCC system as we go forward. Probably in another couple years we'll be back to the way it was.

JUN

Paul,

So far haven't heard anything major on HVCC, besides when it was first introduced to some serious flak. Maybe in another year we'll have a better picture on how it's doing.

Esko: I've found it be relatively harmless so far. That being said, it only takes one screwy deal to make one wonder. Therefore, time will tell. Thanks for the comment! Take care.

I attended a local realtor association meeting this morning and two appraisers were the guest speakers. The appraisers made a comment that I think is important for realtors to hear.

In California, where values in most areas are depreciating, we are running into many situations where houses are not appraising for their sales prices. We are finding ourselves forced to assist borrowers and their agents to rebutt low values. Realtors are being asked to supply additional supporting comps.

There is a disconnect between the realtors idea of a comp and the appraisers' and lenders' requirements for comps. Realtors need a quick cheat sheet on what a "good" comp is.

Appraisers can use the following:

- a total of 5 comps are required

- 3 of the comps need to be sold properties within the last 90 days

- the other 2 can be pending or listed

- they should be within one mile of the subject

- they should be within 20% of the subject's square footage

- the appraisers need to "bracket" the value with comps on the low and the high side

- it helps the appraisers if the realtor can add descriptive notes about the interiors of the comps

- for pending sales, it helps the appraiser if the realtor provides the escrow company name and number

Please add any bullet points to the appraisers allowable comps cheat sheet for realtors.

JUN

Gil: Thanks for the update. I appreciate it. The appraisals I've seen since 5/1 have been thorough and comprehensive following the bullet points you outlined above. So far I've had no problems. I expect to run into one somewhere down the road but, in our business, there will always be something! Take care.

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