Settle this DISPUTE over HVCC!

By
Mortgage and Lending NMLS #94045

Help me out here. I have a 20 year veteran Real Estate Developer telling me the HVCC is a good thing! Really!! That onerous Home Valuation Code of Conduct that has sent many brokers and borrowers running to FHA in order to get a decent valuation. I'd really like to hear your experience. Any pointers welcome!

His arguing points are:

1. Mortgage Brokers (and Realtors) are jealous we no longer 'control values'.

2. We are just eager to create higher % loans for the most money and screw the borrower.

3. Appraisers won't travel outside their areas due to travel costs.

4. Appraisal Reviewers work the same region as the appraiser and know the turf.

OK: These 4 points are pretty off base. How can you sputter an answer to someone with these kind of blinders on to what is really going on? Most of us in the residential lending side are so in knots over having no contact with our appraisers, especially to SAVE the borrower if their deal is not doable. What if something needs to be corrected, however minor? 

Mortgate Brokers never controlled value. Anyone who tried is out of business (including Countrywide and Washington Mutual). Point 2 is always a greed factor that most borrowers get wind of. If you try to talk get borrowers into loans they can't afford you are out of business by now.

The appraisers willing to travel distances in my area are quite prevalent! I had one guy tell me he covers Oregon to the BC border and feels informed about anything on the west of the state. Guess he likes to drive?

Unfortunately, owners and buyers feel their values are being unfairly downgraded by this system. We can't comment now. If the value is not there, we now face multiple appraisals and reviews, which takes time and money out of everyone's pocket. Often the borrower's credit is dinged beyond repair in the process to review and resubmit to a new lender when their AMC trashed their value. We have had underwriters three time zones away knock our values and pull their own comparables.  Asking for a review costs on avearage $400 and the risk is it will be reviewed by yet another faceless person at a computer in another state who is looking at sales data with no idea what the neighborhood factors are. So much for local reviewers?

Did this person's banker friends just put him up to annoying me? Oh yea, probably! HUH! I fell for it. That's right. This person's banker pals aren't lending him any money right now for HIS developements so he's really annoyed a loan officer can scurry over to FHA and get money for home buyers. Ya THINK?

If you'd like to urge congress revisit the Home Valuation Code of Conduct, please consider adding your name to the petition: http://www.hvccpetition.com 

Posted by

 

 

SUSAN TEMPLETON IS A LICENSED LOAN ADVISER IN WASHINGTON

NMLS# 94045

                 

 

Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. Loannetter is a private brand owned and copyrighted by Susan Templeton.

 

 © 2005-2015 susan templeton copyright

 

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Location:
Washington
Groups:
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Tags:
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hvcc reform

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Rainer
293,571
Melissa Anderson
Mortgage of Texas & Financial - San Antonio, TX

I believe that bankers were so busy taking money from WA (US) that they did not fight HVCC properly.  NAR also failed, they did not do enough.  Appraisers could not afford to fight it either.

My best option for you is to educate your realtors and make sure you have good comps.  You can also be present when the appraisal is done and provide the appraiser with copies of the comps you used to establish the purchase price.

Sep 14, 2009 06:08 PM #2
Rainmaker
66,965
Susan Templeton
Bellingham, WA

Rick, Not one, but two good points! I did have one where we just stood our ground and only got met half way but what a fight. Either way the cost of moving and time of resubmitting is such a waste!

Hey--LIKE your company name!

Sep 14, 2009 06:13 PM #3
Rainmaker
66,965
Susan Templeton
Bellingham, WA


Thanks, Melissa, The bankers certainly did get a good feed from taxpayers. Which is why it's so baffling to have to tell folks we can't get their loan if the value comes up short.

Are you having that experience in your area? In Washington State the values have not lost as much as many other states (5%-9% last year depending on location) yet our underwriters seem to feel justified challenging values. Anyone else seen this?

Sep 14, 2009 06:16 PM #4
Ambassador
690,348
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Susan: I haven't had any issues with HVCC yet. I personally think the hysteria was overblown. I do feel sorry for the appraisers I used to work with. I enjoyed the relationship and now there is none. Other than that, values have been fine and the reports are coming in quicker than before which is a bonus. Perhaps I'll change my tune if I run into a roadblock on one. Thanks!

Sep 15, 2009 02:09 AM #5
Rainmaker
66,965
Susan Templeton
Bellingham, WA

Hi Paul, Good for you!  I miss being able to discuss the general market trends and guidance for refinance borrowers. Of course many homeowners feel their values are being 'knocked' by the new system. I get the strong sense that consumers feel they are paying more for less.

Sep 15, 2009 07:11 AM #6
Ambassador
690,348
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Susan: Yes, values are less. I've found most homeowners are aware of this and are o.k. with it. Some complain but I've found a much more compliant borrower the past year. I think they're just happy they can get a loan! Take care.

Sep 16, 2009 03:05 AM #7
Rainmaker
66,965
Susan Templeton
Bellingham, WA

So Paul, Do you think the lower values were justified or are you not taking a position? Most are happy we can get them a loan. The question is if this system is eroding equity. According to many sources that is happening nationally. We can only comment on what we see in our locales. Asking borrowers to make up the difference in a previously agreesd sale price is bringing down the sale price --or killing the sale here!

Sep 16, 2009 02:12 PM #8
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Rainmaker
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Susan Templeton

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