Since the inception of HVCC, problems and complaints have become pandemic acorss the country. I've written about the problem before - from the NAR Convention where HVCC became a major point of contention at a panel discussion with Freddie, Fannie, FHFA etc. and later when a study was released showing appraiser fraud up 46%. From more than 100 commenters on these and other sites where these blogs are posted, there has only been one (1) person who has been adamantly in favor of HVCC, plus the spokeshole for Fannie Mae at NAR who noted that her complaints were 'way down'. She later mentioned that she did not take complaints from Realtors®, lenders or members of the public - but she was referring only to complaints from appraisers.
Even appraisers of my acquaintance are less than pleased with the program since it cuts their pay, bumps the hours they have to work and the distance they have to drive. In fact complaints from virtually everyone involved have become so prevalent that the California Association of Realtors® has published a compilation of resources for Realtors® and their clients who have been the victim of shoddy appraisals.
By all indication the problems are not getting better, they are increasing in both frequency and severity. I saw an appraisal last week on a property my son had in escrow. It was ridiculous. The appraiser was from over 100 miles away and did not even visit our community. While the property is in an upscale gated community, the comps included homes from other neighborhoods as far as 6 miles away with no similarities whatsoever to the subject property. Needless to say the appraisal came in low. Needless to say he complained and was reluctantly granted a review appraisal opportunity by a local appraiser. The 2nd appraisal came in higher than the sale price. At least his escrow closed yesterday - many are not so lucky.
The only way to weed out the consistently bad apples is to comlain often and loudly - maybe something will get done about it. Find out where your state office of OREA is and start filing complaints. Sooner or later these people will get tired of the complaints and start listening. Maybe. Here's where Californian's can file your complaints:
EALTORS® MAY FILE CONFIDENTIAL APPRAISER COMPLAINTS
REALTORS® and their clients who encounter unlawful or unprofessional conduct by an appraiser may file a confidential complaint with California's Office of Real Estate Appraisers (OREA). Since implementation of the Home Valuation Code of Conduct (HVCC) in May 2009, REALTORS® have reported many challenges and difficulties with appraisals, such as low appraisals, inexperienced appraisers, out-of-area appraisers unfamiliar with a local neighborhood, and problems with Appraisal Management Companies (AMCs). Appraisers are regulated by the OREA, and starting January 1, 2010, a new law directs the OREA to develop a registration process and other regulations to oversee AMCs as well.
A complaint of appraiser's misconduct may be filed with the OREA. The complaint may be made confidentially, but proper prosecution may ultimately require the complainant’s testimony in a legal proceeding.
To address HVCC and other appraisal issues, the following is a compilation of resources for REALTORS® and their clients:
- California Office of Real Estate Appraisers website is at www.orea.ca.gov.
- OREA Consumer's Guide: Filing a Complaint and the Investigation Process.
- OREA's Complaint Form and Instructions.
- Text of the Home Valuation Code of Conduct.
- Fannie Mae's HVCC Frequently Asked Questions (FAQs).
Federal Housing Finance Agency Notice dated July 22, 2009 addressing certain HVCC issues.
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