Jul 21, 2009

HVCC

Much of the current controversy around appraisals stems from the May 1 implementation of Fannie Mae’s and Freddie Mac’s new Home Valuation Code of Conduct – a set of standards pushed by the New York Attorney General’s Office as part of a settlement with the Federal Housing Finance Agency.

Critics of this new code are of the opinion that this has greatly elevated the status of Appraisal Management Companies to the detriment of the mortgage and housing markets. Experienced appraisers feel that they have been sidelined by these AMCs in favor of appraisers with little experience, but who sign up with these AMCs to perform appraisals at a low cost in return for large quantities of work. (quantity discounts).

Separately, Fannie and Freddie have moved to tighten their appraisal standards outside the framework of the HVCC and beyond industry rules by mandating a new “market conditions” addendum. According to many this will cause a disturbing rise in failed home sales where appraisals won’t support purchase prices and mortgage loan-to-value requirements.

In another post, PrivoCorp (http://www.privocorp.com)- the fastest processors of home mortgages, will articulate some of the things Congress is considering doing in this regard. We welcome all opinions in this matter.

3 comments:

Cj said...

The biggest problem is not HVCC, but the captive AMCs that lenders force their brokers to use. There are a large number of crappy AMCs out there, but since they get exclusive feeds of loans to work on, no matter how bad they are, they have no incentive to improve. Competition would fix 90% of the problems people are having with HVCC.

I love my AMC, and HVCC has caused me practically no problems whatever. But I know I'm the exception, and I'm very lucky.

Blogger said...

CJ - you're right. Its the way HVCC is implemented that might be at the root of the problems being faced by many including appraisers, borrowers and brokers.

Johnpolarish said...

Disagree with both of you... It was far left, having your cake and eatign it too... Now it is far right... You gotta wait for a menu, and wait to get served... And if you don't like it... You gotta eat it anyways...

It's gotta come back to center... Only experience will fix this... (enough times getting it right and getting it wrong)...