It's truly amazing how we, in the real estate industry, can adapt to change. I guess a large part of this developed ability is because we have to.

When you mention  HVCC  to a lender or a Realtor, you'll probably see a scowl on their face, or you may receive a nasty comment, particuarly if they have recently had a problem appraisal on a recent transaction.

HVCC, what's it do?

The intention, in its broadest sense, was to isolate appraisers and the appraisal process from any outside influence over their work, that is determining an opinion of value for a specific property. Like any regulation it has it's good points, maybe, and its bad points.

Here's where we start;

No employee, director, officer, or agent of the lender, or any other third party acting as a joint venture partner, independent contractor, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner...

WOW!!!

Or in any other manner, what was left out?

In an article and video on Realtor.org Jerome Nagy, NAR policy analyst, states that the intent is to set up a "Firewall" between the lending participates and the appraisers. He further states that this does not have to be an AMC (Appraisal Management Company), but that many/most lenders select this method.

Realtor.org reprots that in a survey conducted with approximately 30,000 member responses, 37% reported that they had had transactions voided due to appraisal issues.

37%.....I don't like that number!

The most difficult part for me is that some of the appraisals may have been accurate, in that the purchase price couldn't be supported by recent sales. How many? Don't know.

I found it interesting that while the restricitons for appraisal communication with appraisers is fairly stringent that in FNMA FAQ'S (frequently asked questions), published in July of 2009, it said that the code does not specifically prohibit communication with an appraiser by a Realtor.

Here's what I don't like or understand;

Credibility; if it is the answer to inflated appraisals, why was it not adopted by the governmental agencies. I mean who likes regulation more than them? The answer is;

NO BODY!

Why are the AMC's not more closely regulated?

Why do I continually see appraisers from outside the market area? How much local market knowledge can they have if they're attempting to cover large parts of the state? Can this be done effectively?

Personally, I don't think so.

Okay, enough. Does it work, is it working?

The idea was to not try to force an appraiser to;

"Hit a number"

But we furnish them with a copy of the contract, which is allowed. And it is allowed that additional data be presented to an appraiser to influence their decision, after the appraisal has been completed.

So.....

It slows down the process somewhat, with what I feel does not truly accomplish the stated goal.

So.....

In my opinion, for what it's worth;

NO! it's not working.