HVCC TO BE ELIMINATED OCTOBER 21ST, 2010

90 Days after President Obama signed the Dodd-Frank Act, HVCC will no longer exist and hopefully this will be a step in the right direction for a
Real Estate Recovery.

HVCC (Home Valuation Code of Conduct)

Effects on the Consumer, the Real Estate Industry and this
Nations attempt to recover from the Worst Financial Crash
since the Great Depression.

editorial: On May 1, 2009 the HVCC was initiated throughout the Country on every mortgage transaction that involves an appraisal that is sold to Fannie Mae and Freddie Mac. This involves all conventional loans which prior to the present meltdown was approximately 70% of all lending. In fact, up until the end of 2007 most lenders did not know how to prepare an FHA loan or application. FHA loans are Government backed residential mortgage loans. With the banking system crippled, conventional loans seized up and nearly came to a halt. Presently, the conventional mortgage market is still trying to get back on its feet albeit very slowly and cautiously. Then there is the HVCC.

The HVCC came about due to pressure being put on an appraisal management company called eAppraiseIT by a large mortgage lender Washington Mutual in the State of New York. The Attorney General of New York created the HVCC and to stay out of litigation, arranged to have Fannie Mae (FNMA) sign an agreement that all loans placed through FNMA & Freddie Mac would have to adhere to this new HVCC. It makes one wonder, when there was collusion between an AMC (Appraisal Management Company) and their lender client why would FNMA get involved. It is very ironic however, that at the same time FNMA signed this agreement they (FNMA) was in the middle of the worst business crisis that company has ever seen, they were about to go bankrupt. So one wonders, if they just signed on so as not to make waves and/or if they even looked at it and considered the ramifications the HVCC would have on not only their business but the rest of the industry and the national economy as a whole.

Again, it makes one wonder, why when all Lenders are Federally and State regulated. Appraisers are Federally and State regulated, why now has the bulk of the appraisal business being funneled through these AMC's that are neither Federally or State regulated. NO regulations whatsoever. Additionally, costs have increased due to the middle man and this doesn't even cover any RESPA violations by these AMC's. If a borrower pays (for example) $500.00 for an appraisal, the borrower is unaware that the appraiser is only getting a small portion of that fee and not what they thought they were paying. I could go on there are so many more issues, however, I'll let others state additional information below in the links. But with a little thought, how could a borrower or lender be guaranteed the quality service they deserve with quality reports. My grandfather always told me, you get what you pay for.

Below are links to national publications, reports by major news outlets, reporters and opinions from professionals in the industry. The information supplied is to help YOU make your own decision as to the merits of the HVCC.

As a side bar: Nowhere in HVCC does it state a lender is REQUIRED to use an Appraisal Management Company (AMC). To the contrary, Section III - Appraiser Engagement, sub-section A, B & C state the requirements for lenders when ordering appraisals. It's amazing not more lenders have figured out that HVCC does not force them to order appraisal via AMC's.

LINKS:

NEWS FLASH!

Prime example of AMC RIPPOFF to CONSUMERS, APPRAISERS & THE ECONOMIC RECOVERY!
Here is a help wanted ad from an AMC. This shows what they are all about and why the most experienced appraisers are leaving or have left the business or will not work for AMC's. This is only adding to the Real Estate CRASH! The Fees section reads, "Fees – Products have a standard flat fee regardless of what state the property is located in on all properties up to 1 million dollar or 1.5 million dollars dependent on business line. For this reason it is important for PAs to attempt to place the order to an appraiser with the lowest fee to maintain our profitability. On orders over 1 million dollars the PA is to obtain 3 fee quotes from 3 different offices before assigning the order. In situations where we must use a one time vendor or fee appraiser the PA will need to check as many options as possible to obtain the lowest fee." Click above to read the full employment summary.

A Funny HVCC video

AMC fees revealed!
The information is provided by directly by fee appraisers and include the appraisers fee and may include the fee paid by the borrower. Very interesting!!

Here's a quote: "In 1986, FHA MANDATED the appraisal fee of $225 be paid to all FHA appraisers. FHA realized that a fair wage was required to produce quality appraisal reports. If you adjust the 1986 mandatory appraisal fee for inflation, a current appraisal fee would be $436 (which was approximately the amount appraisers were charging prior to the HVCC)" "Now, due to current "government" regulations, appraisers are being paid PRE-1986 wages."

Click here to check it out http://www.appraisersupport.com/AS/Home.html

Please note that appraisal fees can vary in the same city for the same appraisal. Some appraisers are desperate and offer low fees. Other appraisers can re-negotiate a higher fee. Also, AMC fees vary dramatically around the country and among AMCs.

READ about what seems to be bias propaganda in the form of a SURVEY put out by the AMC's.
After reading this and the comments, it is quite apparent the AMC's are pulling out all the stops to try to save their GOLDEN GOOSE and keep business as usual. Which means basically harming the consumer, appraiser and benefiting the Banks. Additional comments can be found HERE.

Home appraisal system could be dustbin-bound or maybe NOT!
The Washington Post : The net effect, said Roy DeLoach, executive vice president and chief executive of the National Association of Mortgage Brokers, "is that we now have a dysfunctional system that's holding back the housing recovery. Incompetent, low appraisals not only hurt individual sales, but depress property values in entire neighborhoods unfairly."

House Panel TRY'S TO ‘Sunsets’ HVCC in Consumer Finance Bill 
“While I am supportive of ensuring accurate appraisals, I have repeatedly expressed concern that the HVCC has potential to increase costs to consumers, significantly hinder a consumer’s ability to obtain legitimate and reliable appraisals, and adversely impact small business professionals who work in the very neighborhoods where these consumers are looking to purchase homes,” Rep. Gary Miller (R-Calif.) said.

“In fact, since the implementation of the HVCC on May 1,” Miller added, “there are numerous examples of higher costs for appraisals, poor service, the inability to use one appraisal for more than one lender, questionable quality of appraisals, and the inability to make corrections to inaccurate information on an appraisal report.”

• HVCC Code
   

• Fannie Mae HVCC FAQ's
   

• Freddie Mac: Home Valuation Code of Conduct Q & A
   

• Home Valuation Code of Conduct Fix or Fraud - Realty Check with Diana Olick - CNBC.com
  
  Update - Appraisal Code Sparks Huge Response
   

• In Appraisal Shift, Lenders Gain Power and Critics/NY TIMES
  “We’ve been begging for years for enforcement of existing state and federal laws regulating appraising,” said Mr. Kennedy, a leader in the appraisal community. “We thought we were finally going to get that. But the code is doing nothing except putting ethical appraisers out of business.” EDITORIAL: This is a good article that shows just how deep the ********** runs; "In its original draft, the code froze out brokers and agents and placed severe restrictions on lenders. They were forbidden from using their staff appraisers or an appraisal management company in which they had more than a 20 percent interest.
  
  The American Bankers Association and the Mortgage Bankers Association fought the restrictions, saying they would increase costs to consumers. The lenders also argued that Mr. Cuomo had no jurisdiction over their federally chartered operations. Banking regulators, who saw their authority being usurped, agreed.
  
  The final version of the code gives much greater leeway to lenders. For instance, lenders can hire their own appraisers if they “recognize” that complaints will be forwarded to regulators.
  
  The appraisal world was stunned. Dave Biggers, the chief executive of A La Mode, a maker of software for appraisers, said, “It’s like telling me I can steal as long as I ‘recognize’ that complaints will be directed to the police.”
  
  Benjamin Lawsky, a special assistant to Mr. Cuomo, defended the revised version. “Our goal was always for the code to eliminate the causes of appraisal inflation while minimizing any disruptive impact on the industry,” he said. “We believe we accomplished this.”"
   

• Did Andrew Cuomo make a sweetheart deal at the expense of consumers?
   

• Home Valuation Code of Conduct - CNBC.com - Video
   

• Former Board Chair of Tennessee Real Estate Appraiser Commission Speaks Out About the New HVCC - Knoxville News Sentinel Co.
   

• Appraisal Institute Calls on HUD to Rescind Mortgage Regulation - This also includes the AMC's RESPA violation of non-compliance to inform borrowers of actual appraisal fees.
   

• FEDERAL HOUSING FINANCE AGENCY 
  This is the latest statement from the Federal Housing Finance Agency dated 7/22/2009. It was only a matter of time before a Federal Agency involved with the HVCC would have to spin damage control. editorial: We here have seen first hand that borrowers are paying more for an appraisal under HVCC than prior. Others have first hand knowledge of the other issues  cited on this page and cited within the FHFA statement.
   

• Appraisers' being SQUEEZED!
  The Wall Street Journal chimes in on the repercussions of the HVCC.
   

• Cuomo's Appraisal "Fix" Has Screwed Up The Housing Market
  8/19/2009 - "Unfortunately, his quick fix--which has now been adopted nationally--appears to have hurt consumers, broken up legitimate deals, and further screwed up the housing market." Henry Blodget
   

• NAR Survey shows HVCC Impacting Housing Markets
  "An analysis by the National Association of REALTORS® (NAR) indicates that the implementation of the Home Valuation Code of Conduct (HVCC) appears to be having adverse impacts on the housing markets. Recently, NAR Research sent a survey on this topic to a random sample of approximately 40,000 NAR members which generated 3,600 responses. An analysis of REALTOR® responses follows."
   

• HVCC - Will be Mentioned in Congressional Hearing
  10/8/2008 - Today the House Committee on Financial Services, Subcommittee on Housing and Community Opportunity will start a hearing in the early afternoon. Although the subject of the Subcommittee Hearing is "The Future of the Federal Housing Administration’s Capital Reserves: Assumptions, Predictions and Implications for Homebuyers", at least one of the several witnesses will discuss the Home Valuation Code of Conduct (HVCC).
   

• HVCC Petition
  “We posted the HVCC petition as a public service to those in our industry who were being impacted, as an outlet to have their voices heard,” explained Tim Kearns, chief executive officer of Think Big Work Small. “We knew this was causing extreme hardship to the industry, but we didn’t expect to get thousands of horror stories from would-be homebuyers whose dreams have been dashed by this well-intended, but misguided policy. Every day thousands of people are getting the rug yanked out from under them in their quest to become homeowners because of HVCC. You only need to go to our petition website to read the stories for yourself,” said Kearns.
   

• HVCC Petition Strikes a Hot Button with Industry and Consumers
   

• Request For Reconsideration of HVCC - Video
   

• View HVCC signatures & read their personal horror stories. At the time of this posting 43,182 signatures have been recorded. Update: As of 3/11/2010 121,154 signatures.
  
   

Caveat: I'm still looking for positive information on the HVCC for balance. I just haven't found it yet. I will keep looking.

As of 03/11/2010 the negative impact on the housing market has grown and still NO POSITIVE response found yet for what seems to be an ill guided folly.

If anyone has any additional links they would like to share, please . Thank you in advance.