THIRD-PARTY FIRMS BECOME KEY PLAYERS.
Little known outside the housing industry, and little understood inside the business- the Home Valuation Code of Conduct (HVCC) was supposed to result in better, more honest appraisals. But a year after it was put in place, there is still a question of whether home buyers are getting what they pay for.
Real Estate professionals, home builders, mortgage brokers and even some appraisers themselves complain that lenders are using appraisers who lack experience and sometimes travel long distances to divine values in unfamiliar jurisdictions, or they base their determination on other sales that are hardly similar to the property they are appraising. They also gripe that sub-par appraisers who get the most assignments do shoddy work and often take longer to turn in their work- so long that deals are falling through.
Negotiated between New York Attorney General Andrew Cuomo and Fannie Mae and Freddie Mac, the two government sponsored secondary-mortgage-market institutions that help keep the money flowing to primary lenders, the code effectively blocks anyone who has financial stake in a transaction from pressuring the appraiser to "hit the numbers" necessary for the lender to approve the loan. That's a laudatory goal that all agree was log overdue. But the antagonists say their issues aren't with the HVCC itself but how the lending community has implemented it.
Instead of erecting their own firewalls between real estate agents and loan brokers on one side and appraisers and underwriters on the other, most lenders have turned the appraisal-ordering task over to third-party appraisal management companies. and not surprisingly, the management companies say the complaints are way overblown.
Comments(1)