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

Reblogger Carra & Shae Riley
Real Estate Agent with Brokers Guild Cherry Creek Ltd IA100052670

 

Gene Mundt is a lender with over 30 years experience and  has written a great post on appraisals in today's real estate market. 

Gene has been an appraiser and knows how to help buyers avoid costly time and financial mistakes. This information can be the key to taking some of the anxiety out of today's real estate transactions by opening the door of communication. 

Thank you Gene for such great insight. 

I am pleased to announce that Gene Mundt will be appearing on CarraRileyLive.com for a webinar on today's lending process in July.  Watch for the announements and learn more from Gene.

 

 

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.

                            

www.genemundt.com

gene@chicagobancorp.com

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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Difficulties with appraisals are part of my job now, I've just learned to deal with them.  I think HVCC didn't accomplish what it set out to do.

Jun 22, 2010 10:02 AM #1
Rainmaker
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Carra & Shae Riley
Brokers Guild Cherry Creek Ltd - Westminster, CO
Helping people Transition at all ages!

Tammy ~ Waves.. EVERY Transaction!  part of the job description. :)

Jun 22, 2010 10:18 AM #2
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Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy and evenin there Carra

I have read a lot about appraisals being a real problem any more. The folks in my local area of 10 miles, have it really locky. The main bank to do business with, do their own loans and use only local appraisers.

This sure is at the top of the list of mighty fine written blog posts on appraisals. It sure was a mighty fine pick to do a re-blog of.

Have a good one
Dale

Jun 22, 2010 02:14 PM #3
Rainmaker
320,660
Carra & Shae Riley
Brokers Guild Cherry Creek Ltd - Westminster, CO
Helping people Transition at all ages!

Dale ~ Thanks.. Gene really does have it all together to help buyers! 

Jun 22, 2010 06:03 PM #4
Rainmaker
317,467
Susan Brown
Keller Williams NE, Kingwood Texas (Humble & Atascocita too) - Kingwood, TX

Carra, I do think that appraisers coming to our area from across town are at a disadvantage & in turn put our sellers in an unfair situation. Some of the comps don't even make sense anymore.  On a one-story sale, using two-story comps.  Or going out of a golf course community to use homes in another non-golf course neighborhood.  We all want to be fair but it has gotten weird.

Jun 23, 2010 04:38 AM #5
Rainmaker
642,556
Dawn A Fabiszak
Private Label Realty ( Denver metro area, Colorado - Aurora, CO
The Dawn of a New Real Estate Experience!

Carra ~ I agree with Susan.  We have had appraisers that have been assigned a property that is so out of their area of expertise.  It is a major faux pas.

Jun 24, 2010 06:03 AM #6
Rainmaker
320,660
Carra & Shae Riley
Brokers Guild Cherry Creek Ltd - Westminster, CO
Helping people Transition at all ages!

Susan and Dawn ~  I have not checked the NAR newsletter but I wonder if there is a group doing something on the Federal level to get this corrected?

Jun 24, 2010 08:23 AM #7
Rainer
9,781
John Dovenbarger
Your Castle Real Estate, LLC - Lakewood, CO

It seems to me the Appraisers are not very happy with the new system either.  I think they are working harder for less money and often feel like they are caught in the middle.  Fear of the regulatory guillotine is also a factor!

It is our new reality, isn't it!

Jun 24, 2010 10:31 AM #8
Rainmaker
261,840
Barb & Sal Dragotta
Macomb, MI
Macomb County Michigan

Carra...that webinar should be a boon to all of us.  Good idea to post about it early enough too.  It does seem that many states are having the problem with appraisers from out of area, or worse out of that state.  Can you only imagine how these folks must feel--must take a mighty thick skin to know that they are out of their areas or expertise and they are sent anyway.  John's use of the words "regulatory guillotine" brings chills to the spine.
I was under the impression that the concept of the "University of Appraisers or Appraisals" was conceded to be a bad idea & was to be done away with--hope that I read the correct story.

Barb [& Sal]

Jun 25, 2010 01:46 PM #9
Rainmaker
637,816
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

HVCC is a joke and one in very bad taste.  It is/was unnecessary for reptuable brokers and lenders.  But, the few spoil it for the rest.  Hopefully, it will die a quick and painless death soon.

Jun 25, 2010 04:43 PM #10
Rainmaker
320,660
Carra & Shae Riley
Brokers Guild Cherry Creek Ltd - Westminster, CO
Helping people Transition at all ages!

John ~ Good to see you!  Yes.. new reality.. that is a great way of looking at things! 

Barb and Sal ~  Do you remember the song "Strange Brew" ... I think it fits.. I am glad you noticed about the webinar.. will be getting a post out early.. should be fun.. you can join the chat room and ask questions at the time or send questions in on the post and we will cover them. 

Don ~  I like that idea.. quick painless death.

 

Jun 25, 2010 06:36 PM #11
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