At the NAR. HVCC Problems? Not according to the Government.
Here is a great rant, and well founded. We've seen a lack of accountability caused by the HVCC. Two appraisals performed within days of each other had vastly divergent answers (of course, the appraisal done for a potential refi by the contractor/seller's bank was much higher than the one done for the borrower's bank in this purchase transaction.) So we rebutted the comps used for the lower appraisal (some as much as 12 months old and not very nearby.) The AMC sent the rebuttal to the appraiser along with some suggested additional (and more appropriate) comps. The Appraiser responded with "additional comps considered and with adjustments continue to support our previous conclusion."
No kidding - what were they going to say. "Oh you are right, we are incompetent and missed this entirely."?? No, they will always justify their actions (incompetent as they appear) and because we can't direct our business away from them, they are not accountable. Even competent appraisers I have spoken with recognize that this is one of the failings of this NY State-imposed government protection of the poor, illiterate american citizens who can't survive without our stepping in.
The government regulation pendulum has only begun to swing to its fully-imposing, over-regulated stance and we can already see the ill effects. The full effect will be devastating to our economy. -Dave
One of the seminars I attended today at NAR was entitled 'Managing the Risks and Opportunities of the New Home Valuation Code of Conduct (HVCC)."
Let me say at the outset, I sat through the whole friggin thing and didn't note any opportunities - unless you count aggravation as an opportunity. No shortage of risks, however.
NAR did a great job staging this - they had a panel in place that included spokesholes from FHFA, FHA, Fannie Mae, Freddie Mac and an AMC. Oh, and they had two Realtors sitting in for balance. In my humble opinion, if I had a load of the bullshit they were peddling today, I would have the healthiest, greenest lawn in Southern California.
Alfred Pollard, General Counsel for the Federal Housing Finance Agency; Jacqueline Doty, Directory of Collateral Policy for Freddie Mac; and Mark Johnson, COO for LSI (and Appraisal Management Co), started the process with brief statements on why the program was started (to combat fraud) and how well it's working. As Mr. Pollard stated - 'we have experience a systemic event for the financial markets, primary and secondary lenders, Realtors, institutional lenders and appraisers - all of those industries are on the table as we determine what comes next.'
It was interesting to note that the one entity that he left out, the one he happens to work for, wasn't included as being on the table - THE GOVERNMENT. The one institution central to the whole fiasco is the only one not up for evaluation and found wanting. In fact, these sanctimonious bastards are now sitting in judgement of the rest of us and determining how they can keep us from running amok again. Ain't that special.
Our Realtor panelists, Steve White, owner of two large Keller-Williams offices in LA; and Penny Triplet, a Realtor and appraiser from Ohio, stated the litany of complaints that you are all familiar with. Delays, incompetence, bad appraisers, out of area appraisers, higher costs to customers, lost transactions, lack of portability - you name it, they brought it up.
The government people claimed to be listening but they were just dancing. Time and again they quoted passages from the 6 page HVCC document - well this is how it's supposed to work; well, this is what it says; well that's another of those myths; well this is how you're supposed to work through that. Basically they acknowledged that 'there might be a few bad actors in the group but this HVCC has solved a lot of problems and is a wonderful thing.'
Oh, and if you thought it was scheduled to expire in June of 2010 - think again, It's in place until next November and there ain't nothing you or (NAR President) Charles MacMillan or anybody else can do about it. Your opportunity is to learn how to work with it because it's here to stay. Even after the current HVCC expires, some form of the bureaucracy that has been set up to administer it will continue because, like any government program, once born it never dies.
As if the moderator knew the Q & A might get testy, she decided that rather than take questions from the floor, she would just take questions submitted in writing. That lasted about 15 minutes until she could no longer ignore the line of Realtors standing quietly at the microphones waiting to ask questions.
Still no straight answers were forthcoming. Realtors were advised to report bad appraisers - that is if you can figure out who they work for or if the AMC or the lender cares enough to return your call (after 18 months, the office for reporting bad appraisers still hasn't quite been set up but it's coming soon). Realtors are allowed to talk to appraisers and even give them comps, of course provided the appraiser even bothers to call you or come out to your city or doesn't report you for applying undue influence by giving them accurate comps. If you get a bad appraiser you can request a do-over, of course it will be done by the same guy whom is now pissed off and never mind that the delay might cost you the deal. If it's so bad your buyer switches to another lender of course the appraisal should be portable (like you'd want to port that crap) unless the new lender doesn't want to accept it or it's from an appraiser that's not accredited by their AMC, in which case your client will get to buy a new one and hope it's better than the old one. You've got an appraiser from 200 miles away? Or even from another state? Jeez, that's not supposed to happen because the HVCC says it's not so it can't be. That's just anecdotal information. The Freddie Mac rep said complaints to her office are waaaay down since HVCC. Complaints from appraisers that is. Turns out they don't take complaints from Realtors unfortunately.
One Realtor summed it up perfectly - 'The government appears to think the problem in under control. Realtors think the problem is out of control. How do we get the two sides together?
If todays panel is any indication, we don't. Hang on kiddies - it's gonna get worse before it gets better. We're from the government and we're here to help you.
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