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