What Mortgage People Haven't Said About HVCC: That Monkey Is Off My Back (And I'm Glad)

The HVCC has caused me more frustration because I now have no ability to get the appraisal done.  The HVCC has been a huge disaster.  It was designed to help the borrower and has done nothing but hurt them.

Really doesn't make much sense. I have read a multitude of articles and opinions on the subject and honestly can not find any good or worthwhile reasons for it.

I do know that it seems to add time to get to closing which certainly isn't good for first time buyers trying to get in before the tax credit deadline.

Hey - Great Point!!! I have been so busy fighting the thing I never thought to realize the advantages! It still does more harm than good however ,I have always liked the fact I am no longer the middle man between Real Estate Agents, Appraisers and the houses value.  Its actually amazing what some real estate agents submit as comparables to get houses to appraise in this day and age. 

Great post!

From the National Association of Realtor's website:

"HVCC Myths & Facts"

MYTH: HVCC prohibits Realtors and lenders from talking to appraisers.

FACT: Realtors and lenders can talk to appraisers, including requests to consider additional data or to correct errors."

It may be a business decision by "upper management" not to talk to appraisers, but HVCC does not prohibit it.

-Steven Philip Gray / Owner

Next Appraisal

http://www.nextappraisal.net

Contra Costa / Alameda counties California

We still can't talk to the appraisers, really.  They won't discuss value with us.  We can provide comps but they still do what they want and even though we've seen all the comps and they just drive by, they won't listen to a word we say about them when we question their appraisal.

One thing that has been left out of the comments is that appraisers should be (and are) licensed by the state.  Shouldn't the bad ones be punished and removed from the business?  That's what happens to Loan Officers and Real Estate agents.  Instead, Congress felt they were going after the Mtg Brokers for CALLING appraisers to set up the appraisal.

Just another ass-backwards example of our government hard at work.

I laughed when I read this post - I never looked at it from your perspective (shame on me) but WOW are you so right on the money! I have nagged, begged, pleaded, whatever, to get my appraisal back on time for my buyer...........my poor loan officer!

I just had an escrow cancel due to this - however, the problem was much deeper; the loan officer (not one I would have used nor recommended by the way) was being dually instructed by the buyers wife to not spend a dime unless he could guarantee the appraisal - as well as by me, the one supplying all of the comps, etc, as I knew it wouldnt be an issue as long as the appraiser had the comps I supplied. One would also hope the appraiser would call and discuss with the local agents the 3 homes currently in escrow that were model matches or similar square footage, all within the 1 mile radius. However, since he wasnt getting paid, why would he? Because the borrowers wife refused to spend a dime, we got a verbal that the home appraised $9k too low - and had the appraiser physically walked onto the property, it never would have been an issue. The appraiser never, ever called any of the agents re the homes in escrow nor would he take into account the homes' total remodel! However, a home down the street appraised for over its sales price - making it higher than the one I was selling - but the home was all original condition! Makes no sense to me...............

We all have a ton of stories to share about how the HVCC has now wrecked all of our lives - and I don't want the additional responsibility - I have enough to do just to hold a single escrow together nowadays! The good news to my story is I turned around and sold the home to a buyer who actually wanted it, was all CASH so the appraisal didnt matter - and we closed in 5 days! I also did my part - I wrote to my congressman and got a pretty letter in return stating that he is supporting HR 3044 - we need this moratorium in order to iron out the kinks! It is a mess and par for the course, something was enacted that wasnt thought thru - the damage has been done, more escrows are cancelling, values are lowering and no one is getting paid - is this what the banks wanted as a result? I doubt it - and while we all knew they would figure it out eventually, please folks, take a few minutes to email your congressman and ask him/her to support HR 3044 - it will take you 5 minutes - and hopefully by doing so you wont lose another commission! It is hard enough to get an escrow closed today without this further aggravation!

I admit I have not read every posting here but from those I have, it seems the problem is not being able to get deals done in two weeks?  Is that really a problem?  I used to be in the mortgage business and know for a fact you can do a 60 day lock for a quarter point higher than a 30 day lock.  If a quarter point is going to break a deal I think there's other problems the post has not talked about.  Like every change it will require adaptation.  Values have to go up so that sellers can pay for services from their equity.  Problem is a lot of sellers did not have sufficient equity to pay for services so appraisals were pushed.  Why do we need a separate appraisal value when the county assesses value for tax purposes every year.  Oklahoma uses a market and taxable value.  Of course I have the best home in the neighborhood but am not about to call the coounty to increase my numbers (I don't want to pay more taxes).  We're ALL greedy in some aspects.  Don't even get me started on title insurance.

Great post Janet and I love the graphic image!

I would like to comment back to some people who seem to believe this could be a good thing because Realtors and Mortgage bankers "push" to get the value.  Do you also believe that a third party company "owned by the mortgage company" is a great judge?  Or people who have worked and lived in the market. ???

Yet another example of ham handed government regulations (passed by clueless legislators) that do absolutely nothing to address the problem.

Your asked this question:

I keep wondering this: Why can Realtors (who also have a vested interest in the transaction) talk to appraisers, but mortgage people can't?

My answer is: Because Realtors have a stronger, more organized lobby. The reason independent mortgage brokers are the whipping boys for all that goes wrong is because they are seen as the weakest group. The bankers and realtors, being stronger and better organized, get less flack.

This is in no way a criticism of the real estate lobby - I sincerely admire the real estate industry's organizing efforts, and their ability to advocate for their members.

http://www.twitter.com/mortgageva

Wow, so many interesting comments to your post...I think I have read them all!  I agree with many of the comments here that HVCC is only going to hurt our market more.  It's funny how many appraisals are coming in exactly at the contract price or barely above it when I KNOW the property is worth more.  Just as someone else commented above, isn't that just as bad as appraising a property too high?  Maybe it would be better for the appraiser not to know anything about the contract purchase price when completing their appraisal if the government is so concerned about them being influenced. It shouldn't be based on that anyway right?  From what I understand, Realtors in Colorado Springs cannot even provide comps to the appraiser but maybe things recently changed.

Although I do not totally understand all of the changes I have noticed a few things in recent months in my own dealings:  1.) My buyers are paying a lot more for appraisals  2.) Appraisers are calling me to let them into my listings because they do not have a lockbox key to get in since they are not even from Colorado Springs but Denver!  How can they complete a thorough appraisal when they don't even know the area?!  3.)Issues with the appraiser not responding to communications (he was on vacation) almost resulted in one of my transactions not to close on time. 4.)My experience with lenders is they are actually more frustrated with the change because it is negatively affecting their job. 

This whole thing seems shady with AMC's involvement and I feel bad for appraisers that have worked so hard to establish their business over the years. I imagine many appraisers will pursue another line of work and those are probably going to be the experienced appraisers who did a good job.  I think this is a much bigger issue than whether or not it makes OUR job easier.  The more the government gets their fingers into things, the more problems we are going to have, bottom line.

Janet our roles are always changing, are they not?  As a list agent on your transaction I would have been there to justify, as the buyer's agent I would be going for the price reduction.

Who says cats and dogs can't live together?

Heck politicians who have vested stakes in AMCs can make rules and pretend it is for the good of the consumer.  (when it is actually best for the AMCs and banks)

Appraisers are really getting the short end of the stick here.

If we are trying to keep the banks from influencing home values then why do we let them put out their foreclosure properties one or two at a time... they continue to manipulate values by creating a false housing shortage. Multiple offers and bid wars is certainly one way to get the prices up... If they want to get prices up more they should be doing more 203k loans and utilizing the 110% of value feature more.. instead they tell their listing agents "no FHA or VA" loans. They do miss the boat from time to time but no one is perfect.