At the NAR. HVCC Problems? Not according to the Government.

Real Estate Agent with 1st Action Real Estate

One of the seminars I attended today at NAR was entitled 'Managing the Risks and Opportunities of the New Home Valuation Code of Conduct (HVCC)."

Let me say at the outset, I sat through the whole friggin thing and didn't note any opportunities - unless you count aggravation as an opportunity.  No shortage of risks, however.

NAR did a great job staging this - they had a panel in place that included spokesholes from FHFA, FHA, Fannie Mae, Freddie Mac and an AMC. Oh, and they had two Realtors sitting in for balance. In my humble opinion, if I had a load of the bullshit they were peddling today, I would have the healthiest, greenest lawn in Southern California. 

Alfred Pollard, General Counsel for the Federal Housing Finance Agency; Jacqueline Doty, Directory of Collateral Policy for Freddie Mac; and Mark Johnson,  COO for LSI (and Appraisal Management Co), started the process with brief statements on why the program was started (to combat fraud) and how well it's working.  As Mr. Pollard stated - 'we have experience a systemic event for the financial markets, primary and secondary lenders, Realtors, institutional lenders and appraisers - all of those industries are on the table as we determine what comes next.' 

It was interesting to note that the one entity that he left out, the one he happens to work for, wasn't included as being on the table - THE GOVERNMENT.  The one institution central to the whole fiasco is the only one not up for evaluation and found wanting. In fact, these sanctimonious bastards are now sitting in judgement of the rest of us and determining how they can keep us from running amok again. Ain't that special. 

Our Realtor panelists, Steve White, owner of two large Keller-Williams offices in LA; and Penny Triplet, a Realtor and appraiser from Ohio, stated the litany of complaints that you are all familiar with. Delays, incompetence, bad appraisers, out of area appraisers, higher costs to customers, lost transactions, lack of portability - you name it, they brought it up. 

The government people claimed to be listening but they were just dancing. Time and again they quoted passages from the 6 page HVCC document - well this is how it's supposed to work; well, this is what it says; well that's another of those myths; well this is how you're supposed to work through that. Basically they acknowledged that 'there might be a few bad actors in the group but this HVCC has solved a lot of problems and is a wonderful thing.' 

Oh, and if you thought it was scheduled to expire in June of 2010 - think again, It's in place until next November and there ain't nothing you or (NAR President) Charles MacMillan or anybody else can do about it. Your opportunity is to learn how to work with it because it's here to stay.  Even after the current HVCC expires, some form of the bureaucracy that has been set up to administer it will continue because, like any government program, once born it never dies. 

As if the moderator knew the Q & A might get testy, she decided that rather than  take questions from the floor, she would just take questions submitted in writing. That lasted about 15 minutes until she could no longer ignore the line of Realtors standing quietly at the microphones waiting to ask questions. 

Still no straight answers were forthcoming. Realtors were advised to report bad appraisers - that is if you can figure out who they work for or if the AMC or the lender cares enough to return your call (after 18 months, the office for reporting bad appraisers still hasn't quite been set up but it's coming soon). Realtors are allowed to talk to appraisers and even give them comps, of course provided the appraiser even bothers to call you or come out to your city or doesn't report you for applying undue influence by giving them accurate comps. If you get a bad appraiser you can request a do-over, of course it will be done by the same guy whom is now pissed off and never mind that the delay might cost you the deal. If it's so bad your buyer switches to another lender of course the appraisal should be portable (like you'd want to port that crap) unless the new lender doesn't want to accept it or it's from an appraiser that's not accredited by their AMC, in which case your client will get to buy a new one and hope it's better than the old one. You've got an appraiser from 200 miles away? Or even from another state? Jeez, that's not supposed to happen because the HVCC says it's not so it can't be. That's just anecdotal information.  The Freddie Mac rep said complaints to her office are waaaay down since HVCC. Complaints from appraisers that is. Turns out they don't take complaints from Realtors unfortunately. 

One Realtor summed it up perfectly - 'The government appears to think the problem in under control. Realtors think the problem is out of control. How do we get the two sides together?

If todays panel is any indication, we don't. Hang on kiddies - it's gonna get worse before it gets better. We're from the government and we're here to help you.



Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Alix Pinzon 11/13/2009 04:55 PM
  2. Gareth Ellzey 11/14/2009 12:50 AM
  3. Paul Warkow 11/14/2009 03:01 AM
  4. Dave Woodland 11/14/2009 07:41 AM
  5. Gene Riemenschneider 11/14/2009 11:13 AM
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Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Oh, and on the fraud issue - the whole reason HVCC was implemented - Fannie & Freddie say it has had a marked impact on fraud. Most everybody else either agreed it was too soon to tell or that the effect has been just the opposite.

One Realtor from the floor likened the program to having a school with one or two bad kids acting up so they put everybody in detention and confiscated their lunch money too. I forget which one agreed saying that the government does two things extremely well - nothing and over-react.

Nov 14, 2009 09:45 AM #27
Marian Pierre-Louis
Fieldstone Historic Research - Medway, MA
Metrowest Boston

Wow thanks for bringing us a straight and honest assessment from the front lines of the NAR conference.

Nov 14, 2009 10:24 AM #28
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Who owns the HVCCs?  Follow the money!  Someone is making a bundle and you can bet they are a friend of someones.

Nov 14, 2009 11:11 AM #29
Dawn S Kilby

Thank you for the report from NAR.  We appreciate you taking time keeping those of us on the East Coast updated about what is going on in San Diego.  HVCC is not only difficult for us as REALTORS...we have appraisers who disagree with HVCC totally.  Most appraisers are not the enemy, but it is difficult to keep that in mind when a deal is going south due to the appraisal!  Please continue to provide your candid updates!  Thank you again!

Nov 14, 2009 01:17 PM #30
Jirius Isaac
Isaac Real Estate &TriStar Mortgage - Kenmore, WA
Real Estate & loans in Kenmore, WA

Gene, The more we see how they are trying to shove this stuff down our throats, the more angry I get.  There is some hope for us though, because 3 weeks ago a bill with an addendum eliminating HVCC passed the House Financial Affairs Committee.  Please, everyone, check out my BLOG and the corresponding links to help get rid of this death grip we have from the government!   Only about 8 comments were made on this blog since it was not featured.  We need to get the word out.

Nov 14, 2009 02:51 PM #31
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Gene - Nobody owns HVCC. It was simply a policy suggestion by New York Attorney General Andrew Cuomo that has, for some reason, become the lawe of the land and changed the face of the appraisal business. However, if you follow the money it leads to the AMC's the appraisal management companies that have sprung up to fill this niche and the largest ones are owned by the lenders who were supposed to be eliminated from the appraisal equation by HVCC to eloiminate fraud. Go figure.

Dawn - Most appraisers in my area disagree wholeheartedly. It is a bum rap for all concerned.

Jirius - I'll check it out. Thanks. One bill has snaked out but according to the powers that be - including NAR assessment of the situation, there will ne no moratorium barring a miracle. Realtors and consumers could make that miracle with a massive effort but we'll still be saddled with some offshoot of HVCC.

Susan asked if it would make sense for the seller to order an appraisal at the time of listing to address some of the HVCC problems? Unfortunately not because an AMC currently appraisals are not portable by law so an AMC is well within it's right to refuse to accept an appraisal from another appraiser who may not b e on their accredited appraiser list. So your seller would be spending an extra 400 -700 and they would be doubly pissed off if they price their home at what one appraiser says only to have that report summarily rejected in favor of some bozo with company XYZ whose appraiser comes from another county or state. If enough people get pissed off it might help the cause but until then they can save a few bucks and just hope for the best.

Nov 14, 2009 03:21 PM #32
Dave Woodland, Loan Guy, Former CPA, Bend, OR
Gene- Cuomo (NY AG) imposed this on National Banks chartered or qualified in NY State. Hence every large lender is saddled with it. And yes the money is going to the AMCs. Borrowers in our area pay on average $75-125 more than they used to and appraisers are making $100 or so less per job. That puts about $200 per into AMCs pocket for tracking it all on line. Loved your line "We're from the government & we're here to help you.". It's only just begun... -Dave
Nov 14, 2009 06:49 PM #33
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Gene:  That's for your update and obviously the 'feds' think things are working just fine and the realtors are anything but pleased.  Just another scenario where the government is saying 'you're not happy with what we've cooked up?'  Someone's dissatisfied?  Jeez.

Just put a link for your post to Stacey the editor of Realtor Magazine who wanted us to help her out with some good interesting articles.  Wow, let's see if she will help us out.

Nov 15, 2009 06:41 AM #34
Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

Gene ... Thanks for the article about HVCC and panel at convention.  We all in private business and our clients need lots of luck with the HVCC appraiser situation.  Keep it going.

Nov 15, 2009 09:03 AM #35
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

I've just posted a new one "More HVCC Problems? Appraisal Fraud Up 46% Over last year." The amazing thing is that this poll shows inflated value appraisal fraud up 46%. I have yet to hear a story of inflated values. Most of you seem to have exactly the opposite problem - with appraisals coming in way under value. I don't know what's going on but HVCC clearly isn't working as it was intended - if Andrew Cuomo ever really knew what he intended to do in the first place.

Nov 15, 2009 04:30 PM #36
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Is there ANYONE who like HVCC? Appraisers make less, Loan officers and agents think it's a nightmare and what exactly is the benefit to the buyer who can't buy the property he wants for the price he is willing to pay?  Disappointing to hear that this is NOT going away. I thought there were motions in that direction.

Nov 16, 2009 02:54 AM #37
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

There is motion in that direction but not much traction. There is a petition circulating that will be presented to Andrew Cuomo on Wednesday. NAR was initally hoping to achieve some success through the legislative moratorium process but that appears stalled right now and the Fannie guy told us at NAR that if we thought it was going away in June 2010 we were wrong - it extends until at least one year from now and even then will not cpompletely go away because it has too much momentum.

If you are interested in hearing more and signing the petition, please visit.

Nov 16, 2009 10:25 AM #38
Sam Wigginton
Sam Wigginton - Round Rock, TX

I sat thru the same HVCC seminar at NAR and I got the same response as you did. It was nothing but BS. I am amortgae banker and Realtor, and most of our loans are rural properties, most of our clients have 700+ credit scores and the loans are at 80% loan to value. The way appraisals are coming in and being critiqued by underwriters, I will soon be out of bussiness. We are honest, do not lie, and never asked appraisers to get us a certain value on a home in the past, and have not committed fraud.  Thank you a lot US Government and HVCC, now lets go throw away some more tax payers money to bail out some more banks, and let them turn down our loans. I wonder if I can get a government bailout when I go broke. I am sure I already know the answer.

Nov 24, 2009 06:44 AM #39

i liked HVCC before but not now..


Jan 14, 2010 10:37 PM #40

i liked HVCC before but not now..


Jan 14, 2010 10:37 PM #41
Kevin Cottrell
Austin Real Estate Today - Austin, TX

We're not having nearly as much of an issue w/HVCC in St Louis as we did last summer.  I think we'll see this whole program go through a major revamp (or best case) shut down.

Jan 20, 2010 09:38 PM #42

thanks for the info..shut hvcc down? really? larnarca

Jan 21, 2010 10:36 PM #43

wow..great post about hvcc here..cyprus

Jan 24, 2010 12:54 AM #44
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

"...unless you count aggrivation as an opportunity..."

I love it!  It reminds me of Raising Arizona:

"Do these balloons blow up into funny shapes?"

"Not unless you think round is funny!"

Jun 24, 2010 03:55 PM #45
John J. Woods
Big Dog Press, LLC - Winder, GA
Going where no man has gone before - wouldn't you?

Just another unbalanced, bullshit, bitch-session.  NO ONE REPRESENTING APPRAISERS EVEN ON THE PANEL!

I no longer do appraisals.


Jun 29, 2010 06:59 AM #46
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