Ok I admit - the title of this article was intended to get your attention. Ignorance is likely too strong of a word. But, let's clear the record here a bit: there is a ton of confusion when it comes to HVCC and inaccurate information about HVCC may be hitting you and your clients in the wallet.
Here is the actual link to the HVCC guidelines:
https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf
I admit that reading information about HVCC is not the most fun way to spend an afternoon. I'd rather be drinking a Corona in a hammock someplace warm without a care in the world. But let's face it - knowledge is power and there is information in this link that may be very helpful to you with your profession. If you'd prefer not to read the whole 12 pages or so, here are some highlights.
First, is it ok for a Realtor to talk with an appraiser? The answer is yes. There is nothing in the HVCC code that prohibits Realtors and appraisers from talking with one another. (See Q 10)
Second, MUST appraisers use foreclosures as comps in their reports? The answer is no. "It is up to the appraiser to determine if the data is applicable and appropriate or not." (See Q 19)
Third, can the Realtor provide comparable data and/or explain their pricing strategy to the appraiser? The answer is yes. The Code goes into further detail: "Realtors can often be a source of data in the market in which the subject property is located. Any data provided by a third party must still be researched and verified independently by the appraiser. In addition, the appraiser is required to be provided a copy of the sales contract for a purchase money transaction." (See Q 64)
The reason I am bringing this up is that I have heard from Realtors that they are afraid to have a conversation with an appraiser or to provide comps or information about the property itself. This is a big mistake - as we have all seen, some of the appraisers being used are not familiar with certain areas and your information may be a huge help to them.
Appraisers are also misinformed at times and do not know that they can be speaking with you directly. If this is the case, pass along the link to Fannie Mae's HVCC FAQs.
At my current company, we have an appraisal panel comprised of some of the best appraisers in the State and it is managed by a great team of professionals. Some Loan Officers; however, are not quite as fortunate and have to rely on randomly chosen appraisers from a national vendor. My advice would be to talk with your Loan Officer and find out how their appraisal process works.
I hope this information helps you save a deal or two. Perhaps it will be enough to invest in a hammock? I hear they're comfy for naps.
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