Many of us, mortgage originators and Realtors are experiencing the negative impact of new appraisal rules. The Home Valuation Code of Conduct, or HVCC, forced on the industry by State Attorney General Andrew M. Cuomo, are slowing down sales and mortgage process.
The change came as a result of the mortgage and housing crisis. Many decision makers blamed the crisis in part on inflated valuations. The new rules are preventing mortgage lenders and brokers from ordering an appraisal directly to avoid influencing or pressuring the appraiser to come up at the desired valuation.
Today most lenders are using independent, third-party appraisal management companies. These companies are middlemen, taking requests from lenders and farming them out at random to individual appraisers.
So now, under current rules, individual loan officers and mortgage brokers, who may benefit from the loan, are no longer allowed to choose, hire, pay, or even communicate with appraisers.
Real estate agents also cannot choose, retain or compensate appraisers, but they can talk to them and provide information or address problems.
I believe we need to demand from policy makers that they modify the new Home Valuation Code of Conduct taking into consideration feedback and recommendations from real estate and mortgage professionals, appraisers, and consumers.
- In order to avoid ending up with a very few large national appraisal management firms, lenders should be required to limit the volume of appraisal orders to a single appraisal management firm to 20%.
- Consumers need to have the opportunity to use the same appraisal report with different lenders. The current system makes it near impossible for the consumers to reuse the same report in the event the first lender who ordered the appraisal declined the loan or offered terms unacceptable to the borrower. Right now the consumer has to pay for a new report, or waste a lot of time waiting for the lender to "release" the appraisal report to another lender.
There are many other changes that are required to better protect and serve consumers. Right now I am suggesting you do what I did which is to sign an online Petition to Rescind HVCC has it stands today. Yes, we need change but we need the kind of change that will really benefit consumers instead of policy changes imposed by overreacting politicians.
Please click on the link below if you want real change.
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