Appraisals & the HVCC ... Are You Frustrated With the Current Hassles?

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI

Appraisal

    

     Appraisal issues continue to be a problem for competing Lenders, Banks, and Mortgage Brokers.  I receive calls from Attorneys and Realtors ... even Borrowers themselves (after the loan has not closed through a competing lender), asking, "What can you do to help this situation"?  Currently, this is happening more often that you would think ... or like.

    

     I definitely do not mind receiving phone calls or pleas for assistance regarding this issue.  I'm always happy to have a chance to help and also grow my business.  And, this is a problem where I think I hold a definite edge over many other lenders.  I am a Mortgage Banker through Chicago Bancorp ... and I retain some control over the appraisers we conduct business with.  A definite plus that pays off during the processing offire bucket a loan.

      

     But as a former Appraiser, I can tell you ... we are seeing issues of a nature that we have not faced prior to the passing of the HVCC ... and seeing them much more often.  We have been left to face a huge "fire-storm" of troubles with nothing but a fire-bucket of water with which to put it out.  In other words, when problems arise ... many times we have few routes of recourse.

    

     Why are appraisals such an issue now?  What are some of the appraisal issues we're seeing?

  • Low Appraisals
  • Longer turnaround times for delivery of Appraisals from Appraisers
  • Appraisers called in to appraise in areas they are unfamiliar with
  • Appraisal Fees re-structured (Some too high, others way too low)
  • Inflexible Appeal processes
  • Communication totally disallowed
  • Delays in Underwriting Responsesconfused couple

     These issues are causing huge losses of time in processing of loans and much frustration.  Many times, they shut down a transaction completely.  I believe that is when I hear from the totally frustrated professionals and buyers.  They have reached a stalemate with their current lender and are hoping that maybe a new lender's appraisal will prove more friendly or beneficial to the progress of their stagnant transaction.

     This is a particularly hard issue to explain to buyers and sellers wishing to complete an important deal.  Communication between professionals should be key in the processing of a loan/sale ... but here we are, unable to communicate in many cases (or another professional unwilling or incapable of listening).  How can they possibly fathom the reasoning for that ...  fraud issues or not?  They are justifiably frustrated and angry.

     In May, 2009, the Home Valuation Code of Conduct (HVCC) came into practice as a means of "providing better appraisals" to the Lenders, protecting Loan "Servicers", eliminating "undue pressures" applied by mortgage officers, and perhaps most importantly ... to reduce greatly, or eliminate, mortgage/bank fraud.

     If the latter items are deemed to be more important in the total scope of things then there will not be a reversal of this new Act, (currently under consideration).  If the former list of items (annoyances), prevents the market from recovering, then there must be some time spent studying the affects of the Home Valuation writeCode of Conduct (HVCC).  There is alot at stake.

    

     If you are currently facing this issue all too often within your transactions, suffered through these problems within your own real estate transaction, or just believe that review of HVCC is needed ... make your feelings known to HUD, Fannie Mae, and your representatives in Congress

     If you are a real estate professional .... please contact  and urge any professional organizations that you are a member of to seek this review as soon as possible. The more reasonable voices they hear, the better ... and the more quickly this issue is re-examined and resolved.

Posted by

  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   

Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

 

  

 

 

Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Carra & Shae Riley 06/22/2010 07:59 AM
Topic:
Lending / Financial
Location:
Illinois Will County
Groups:
Realtors®
Mortgages
Chicagoland and Northern Illinois Real Estate
Cosmic Cow Pie...The Rome Way
Bananatude
Tags:
appraisers
buyers and sellers
fannie mae
mortgage financing
hvcc
lenders
hud
appraisal issues

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Ambassador
2,880,350
Anna Banana Kruchten - Phoenix Homes Sales
Phoenix Property Shoppe - Phoenix, AZ
603-380-4886

Gene this is an excellent post and well worth re-visiting these issues again.  We've had inordinate issues with appraisals in AZ this past few years due to our high level of foreclosures etc.  Lately I see some improvement - not much - but at least it appears we're headed in right direction.

Featured in BananaTude!

Jun 22, 2010 01:22 PM #14
Rainmaker
601,332
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Gene - The way I see it, writing to my representatives is like voting - just my .02.  You can't $!^%* about something if you don't vote and if you vote, then your representatives work for you and I'm going to get my votes worth.  Anyway, there's something to be said about the power of the people, the more that people rant correspond, the louder our voice and the louder our voice, the more likely we'll be heard.  JMHO

As for blog syndication, there are so many sites, I strongly recommend that you just start off with one or two and just gradually build your resources up.  Check out this post:

BLOG SYNDICATION: It Really Works (Thx Renee & Jennifer)

Then check out the blog syndication sites on my blog page.  I would recommend you start out with Blogburst and My Zimbio and then just work yourself up to more every week or so.  It can be a little time consuming at first linking up your AR blog to your other blog sites but after awhile it's just part of a routine you get into and it just becomes a matter of maintaining them weekly or so because all of your AR blogs will automatically feed into them.

Jun 22, 2010 01:25 PM #15
Rainmaker
174,893
Kate Kate
San Diego, CA

I told you once my husband wanted to buy me toddler's fire truck to ride around the office, complete with a blaring siren, especially when rates went up or low value was impossible to avoid. 

There were so many good excuses for the siren. I wanted a fire hat too.

It's an exacting business looking out for mortgage borrowers. Gene, your customers are so lucky to have you.

Jun 22, 2010 02:01 PM #16
Rainmaker
354,843
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

Gene, this is a great point as to why buyers and REALTORS need to use lenders such as yourself who still have the ability to control the transaction.  I am sure that your company as assembled a group of competent Appraisers who know the area and do their job in a responsible manner.  Kudos to you for associating with a company (Chicago Bancorp) that has the business sense to treat this business like a business.

Jun 22, 2010 03:27 PM #17
Rainmaker
564,004
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Gene -- Just had an appraisal done where the appraiser was based over 50 miles from the subject property.  You tell me?

Jun 22, 2010 04:05 PM #18
Rainmaker
144,754
Markita Woods NMLS#196099
Fairway Independent Mortgage - Woodbridge, VA
Queen of Mortgages - FHA, VA, Conventional, USDA

Thanks for sharing. So far we have been able to maintain some control over our appraisers too. Even still the HVCC has caused major problems in our real estate market.

Jun 22, 2010 04:14 PM #19
Ambassador
2,008,677
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

We've had a lot of trouble as a result of HVCC with not being able to communicate with appraisers and not having the ability to work with appraisers as familiars as they should be with an area.

Jun 22, 2010 06:03 PM #20
Rainmaker
114,299
Laurie C. Bailey-Gates
Robert Paul Properties - Barnstable, MA
ABR, SFR

Hi Gene,

 

I have had some of those problems.  The one that seems to be the hardest are the appraisers that are from another state that do an appaisal in an area they are unfamiliar with and they don't understand the perceived value of a location.

 

Laurie

Jun 23, 2010 12:11 AM #21
Rainmaker
270,036
Phil Stevenson, CRMP
PS Mortgage Lending 305-791-4874 or 888-845-6630 - Miami, FL
"Mortgage Nerd" in Miami, Florida and Texas

Most people dont realize that you are not required to use an AMC as a part of the HVCC.  You simply cannot have direct contact with the appraiser and you cant have more than 35% of your business closed per year with 1 appraiser.  As a lender, we select our own appraisers that we have known for a long time, and they know to give us the best TRUE value possible. 

The AMCs are the problem, not HVCC!

Jun 23, 2010 01:04 AM #22
Rainmaker
1,839,145
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

I thought the HVCC was being phased out ???? It's one more government attempt that's gone off the tracks !

Jun 23, 2010 01:05 AM #23
Rainmaker
1,235,381
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Anna:  Some areas, such as yours, have had to suffer through more frequent occurrences of the growing number of issues than our Chicagoland area has.  I can only imagine the stress everyone feels our your way.  It's good to hear that you are beginning to see some positives ... as I'm sure you are more than ready for it.  Hope the good news continues for you and the entire Phoenix area.

Donne:  You're a jewel!  Thanks for the info.  Blogburst was something I had already seen and checked out (after your prior message), but I will look into your other site as well.  I knew I could count on you!!  I'll let you know how I'm doing ... (or I'll beg for more help!!!)

Kate:  I can't quite get the picture out of my mind of you ... complete with your 3 babies ... hats and all riding around on that little truck and letting that siren whail!  Thank you for your very kind words.  (I think it takes one to know one!!)

Gene    

Jun 23, 2010 05:20 AM #24
Rainmaker
1,235,381
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Damon:  As I'm sure you are well aware, these days it takes so much more time and energy to maintain any control over your transactions.  We need to be alert 24/7 ... and even then, never-before-heard-of issues arise.  The "job descriptions" for each of us has changed so dramatically in just a handful of years.  I appreciate your kind words, Damon ... as you have always shown through your posts that you are a serious, intelligent, and thoughtful professional that cares deeply about his clients and business.  Simply .. thank you.

Chris:  As a former appraiser, I understand the advantages of being locally based and knowing a market inside and out.  Still, it doesn't mean an appraiser from 50 miles away could not do a good job.  As with any job, it's more about the effort and hard work you're willing to put into it to do a job well.  Sounds like that effort was not made.  With HVCC in place as it stands, we will continue to see the problem you mention happen more frequently.   As a side note .. my son was just out your way on "storm duty" for Westfield Insurance.  Sure hope you don't see anymore bad weather anytime soon ...

Markita:  I use the word "control" carefully when I'm speaking of our abilities.  As you point out, it doesn't take care of every problem ... and we must still wrestle with issues and get them cleared up before moving ahead.  We just have a much better chance of doing that with our companies ... which is a real blessing, isn't it?  I am hoping we see brighter and easier days ahead for each of us.  Thanks for writing ...

Gene

Jun 23, 2010 05:43 AM #25
Rainmaker
1,235,381
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Christine:  I hear ya!  It's happening all too often everywhere.  HVCC needs a good, in-depth look given to it ... and a whole lot of common sense used in its repair.  Keep your fingers crossed!

Laurie:  Chris, in another comment, mentioned much the same thing.  I believe personally, that a good appraisal CAN be accomplished when using an out-of-state/region lender ... but it does have its' challenges.  Time and effort must be taken to get an appraiser that will do the job right .. and well.  HVCC decreases the chances of that happening greatly ... and you are reaping the results of that.  Something definitely needs to be done regarding these changes ... 

Phil:  You bring up a good point.  Still, some have or retain the ability to that better than others.  I'm glad that you have conquered the issue in regards to your work.  Especially when talking of senior issues, you want to take care to get the best possible value for a home as possible.  So much relies on it.  I appreciate your input ...

Michael:  From what I know, HVCC is back on the table for discussion, so far.  A review is possible.  It definitely is being promoted by many real estate professional groups.  We'll see what the results are.  I think the government was right to take a look at the overall issue of appraisals.  I have no problem with them doing so and agree with it.  The result was definitely askew.  As with most things tackled by them, a 2nd or 3rd try will most likely see better results for us.

Gene

Jun 23, 2010 05:55 AM #26
Rainmaker
193,731
Lyn Sims and the Blog Dog
Streamwood, Elgin IL Real Estate - RE/MAX Suburban - Bartlett, IL

Gene, I think that ALL aspects of the loan process have become frustrating to both buyers & agents. Sometimes it is valuable to get out of one situation that is not working smoothly and go into another.  I've done it myself & have sometimes advised it.  Some lenders are so inflexible & have control freak processors/underwriters that they go too far.  Trying to seek out fraud, they run amok thru the transaction.  We all have our horror stories & successes too.  The new rules are just not making the process better for the consumer.

Great post.

Jun 23, 2010 06:07 AM #27
Rainmaker
601,332
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Gene - Phil's (#22) comment is spot on.  No where in the HVCC rules and regs does it state that we MUST order appraisals through AMC's.  As a matter of fact, AMC's aren't even mentioned.  It's lenders that created the whole AMC mess in an effort to get a slice of the appraisal pie.  It's also true that not all lenders use AMC's however, I have found very few that don't.  The majority of lenders are using AMC's (usually ones that own) and therein lies the problem.

Jun 23, 2010 06:20 AM #28
Rainmaker
1,087,093
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

Gene - Thank you for writing this in a clear and understandable post.  We just discussed this issue at our Monday morning meeting and I understood that it was a good possibility that the HVCC would be rescinded.

Jun 23, 2010 07:33 AM #29
Rainmaker
1,235,381
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Lyn: As a lender, I still can't provide a definitive answer to that predicament.  Do you stay in the present deal thinking that you will save time by hammering out the problem there???  Or do you just start over and hope that you don't have the same issue elsewhere?  I've heard it work out both ways ... but frustrations seem to lean towards moving on.  I am greatful that I have at least some control or possibility of input regarding my appraisers at Chicago Bancorp.  Otherwise you'd have to feel pretty helpless.  And you are right ... there are definitely differences amongst underwriters.  Some are more willing to listen and review, while others remain firm and unrelenting.  Some are gun shy ... others feeling their power, I think.  No matter what the reason, it can cause havoc.  Hopefully we see a review of this HVCC soon ... and things improve along with it.  Thanks for the kind words, Lyn!

Donne:  Again ... greed.  It explains alot ... and causes much misery for all.  Sometimes I just want to scream ...

Margaret:  It's good to hear that your office is on top of this issue and discussing it in meetings.  Sometimes just understanding issues more clearly helps ... and creates patience.  Please let me know if I can ever answer any questions for you or anyone else within your agency.  I'd be glad to help if I can ...

Thanks for writing .. and thanks for the thumbs-up on the post ...    Gene

Jun 23, 2010 09:27 AM #30
Rainer
137,004
Brent & Deb Wells
LivingWell Properties - Prosper, TX
Prosper TX

Gene:

Thanks for the information, it was indeed timely.  After I finished reading your post I got a call from one of my buyer's agents.  Our listing did not appraise for value and you know how the rest of the conversation went after that. We were very lucky, since we price our listings at market value we were only down less than 1.5 %, but it could have been much worse.

The appraiser came from over 50 miles away and at least 6 cities > 100k residents. The most frustrating aspect is we as REALTORS have no real recourse. 

Thanks for the information.

Frustrated in DFW

Jun 24, 2010 03:23 AM #31
Rainmaker
1,235,381
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Brent:  Sorry to hear of your predicament ... and yes, being only a small amount over the appraisal can be a real huge blessing.  As I've said in previous comments, as a former appraiser I don't believe the distance of the appraiser is the largest obstacle to a good appraisal ... it's the work they put into it.  A good appraisal CAN be produced if they're willing to do the work to accomplish it.  That being said, it seems to appear that few are.  Totally frustrating.  The HVCC certainly has put handcuffs on the process ...

Hope all worked out with your deal ... and you don't suffer anymore like it in the future ...

Gene

Jun 24, 2010 03:29 AM #32
Rainer
137,004
Brent & Deb Wells
LivingWell Properties - Prosper, TX
Prosper TX

Thanks Gene, everything worked out fine. The buyers agent is a pleasure to work with and our sellers are awesome.  Its just so frustrating when there is very little you can do to point out inconsistencies or even errors. You just have to love it when the government steps in to 'help'.

Thanks again...

Jun 25, 2010 04:00 AM #33
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,235,381

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
Contact Me For Mortgage Answers, Info & Assistance:
*
*
*
*
Spam prevention

Additional Information