As laws and rules emerge on a state-by-state basis with regard to the revised Home Valuation Code of Conduct (HVCC), loan originators and appraisal companies are evaluating possible best practices to protect themselves from stiff penalties that have been tied to these new rules.

While one option is to work with actual appraisal clearinghouse companies, it may involve extra fees...and there are other alternatives available. One is simply the establishing of a "firewalled" department within your company, with staff (who are not a part of the lending chain, or a part of the production staff and process) ordering the appraisals.

As a best practice, loan originators in states where HVCC has become effective should immediately begin exercising due diligence by talking with their lenders and trusted appraisal sources to ensure compliance with the revised code – and learn what method could and should be used.

Additional Resources:
Federal Housing Finance Agency's News Release
Federal Housing Finance Agency's Home Valuation Code of Conduct