HVCC Is Coming!

By
Real Estate Agent with RE/MAX Fine Properties

Things are constantly changing so fast it makes you want to just unplug your TV, radios, and sit in a quiet place until things settle down!  Which brings us to the HVCC (Home Valuation Code of Conduct).  When we first heard about it back in March of 2008, it seemed like we all received an onslaught of emails and newsletter "blips" about the pros and cons practically every day!  So, we strived to stay on top and keep current with all the constant changes.

I know I have been inundated with requests to "explain" the HVCC and what it means in a "nutshell", so thanks to a terrific seminar yesterday with Jay K Delich, SRA, SCRP, IFA, which I was fortunate to attend, here it is:

HVCC

Here are a few major points:

  • *CMA's and Comp Requests will not be allowed. 
  • *Mortgage brokers will not be allowed to order appraisals.    
  • *Mortgage brokers or loan officers cannot request specific appraisers.      
  • *COD payment for appraisals will not be allowed. 
  • *Value pressure on appraisers will not be allowed.         
  • *Owner's values or hoped for values cannot be communicated     
  • *Blacklisting" cannot be done without notice to the appraiser     
  • *"Value Shopping" by the lender is not allowed.      
  • *Withholding timely payment is prohibited.    
  • *Borrowers must be supplied a copy of any appraisal.          
  • *Required 10% re-appraisal or review of reports.        
  • *Lenders will be held accountable for appraisal quality.   
  • *LENDERS will be REQUIRED to report appraisers to State Boards of Real Estate Appraisers if appraiser misconduct is suspected.

And, finally, the lender MUST provide a copy of the appraisal to the borrower not less than 3 (three) BUSINESS days prior to closing.

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Rainer
8,667
Jean DiDaniele
Coldwell Banker Harbour Realty - Onancock, VA

What does it mean that comp requests will not be allowed?  Are appraisers going to use comps or will it be done by replacement cost or other method?  You don't say if the appraiser is going to still have access to the Contract of Sale or if they will appraise the property strictly on its merit?  Seems to me that all the appraisers want to see the Contract of Sale prior to leaving their office and all seem to appraise to the Contract!

Who, in this perfect scenerio will order the appraisal if not the mortgage broker?

I still can't decide if this is a step forward or backward.

Mar 31, 2009 11:17 PM #1
Rainmaker
109,925
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Jean:

Banks will order the appraisals or what we call AMC's appraisal management companies. Brokers are comission or production based and their concern is closing loans, thus undue pressure on appraisers sos they want complete independence from production staff.

Comps will be used. Comp checks are when lenders call us and say hey can you just check this address to see if it will come to the value they seek. This has always been against USPAP, so we never do this, but now it is spelled out in the HVCC.

Noone will be able to pressure the appraisers anymore and we are happy about that, but there are other problems with HVCC.

We do not want the sales contract just to come in at that value! There are many reasons we MUST have the sales contract to review it. so yes we will still need that sales contract.

 

 

Apr 17, 2009 06:51 AM #2
Rainer
4,294
Alison Swain
3rd Generation Appraisal Services - Orlando, FL

Detailed information regarding the sales contract is asked for on the Fannie Mae 1004 form (the apprasial report form).  Unless they quit requiring that or if they allow us to state "appraiser did not review sales agreement," we're going to continue to need a copy for review and to keep in our work file for 5 years.

Mary answered correctly concerning "comp checks" --- they're not a legitimate way to conduct business unless they're USPAP-compliant.

 

May 01, 2009 05:05 AM #3
Rainer
271,728
Dusty Rhoton SRS, MRES, ABR, SRES, GRI
RE/MAX Fine Properties - Flagstaff, AZ
Flagstaff Real Estate

Jean;

Thanks for your response in my absense.  I appreciate you taking the time!  Happy Valuations to You!

May 26, 2009 04:28 PM #4
Rainer
271,728
Dusty Rhoton SRS, MRES, ABR, SRES, GRI
RE/MAX Fine Properties - Flagstaff, AZ
Flagstaff Real Estate

Oops!

And you too Alison! 

May 26, 2009 04:28 PM #5
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Rainer
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Dusty Rhoton SRS, MRES, ABR, SRES, GRI

Flagstaff Real Estate
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