Friday, May 15, 2009

HVCC Costing Borrowers MORE

UPDATE - MAY 16, 2009
As usual, Washington Post columnist Ken Harney, author of the popular The Nation's Housing column, cuts to the net effect of the Home Valuation Code of Conduct (HVCC).

New appraisal rules costing more for mortgages, refinancing

WASHINGTON — How about this scenario the next time you refinance or apply for a new mortgage: The real estate appraisal that used to cost $325 now costs $450, even though the appraiser doing the work is only getting $175 or $200.

Plus, your appraisal-related charges may now be subject to add-on fees you have never heard of: $50 to $100 in "no show" penalties if you get stuck in traffic and miss your appointment with the appraiser, or an extra $50 to $150 tacked on if the property is worth more than $500,000.

Worse yet, the person now conducting your appraisal may be new to the field — willing to work for a cut-rate fee — and may not be as familiar with local value trends and pricing adjustments as an appraiser with more experience. If your mortgage application is denied by one lender, you could be forced to pay for a second full appraisal since the new lender may not accept the first.
After signing up with one management company, he (an appraiser) says two consumers commented to him, "Wow, you really charge a lot."

They were each being hit with $550 appraisal fees, while Facchini was getting just $250 from the management company. As he sees it, that leaves $300 of "slush" somewhere in the process — some going to the management company, but the rest probably "flowing to the lender for doing absolutely nothing."

Read the story HERE (St. Petersburg Times)
or HERE (Washington Post)

Appraiser Active has been sounding the alarm about the negative effects of the HVCC for months. Now that consumers are getting hit where it hurts, their wallets, will Fannie, Freddie, the Federal Housing Finance Agency and New York Attorney General come to their senses, be responsible, and take action to at least delay the implementation of the HVCC until they get it right?

UPDATE - MAY 16, 2009

A related article has been published on TBO.COM confirming Appraisal Managment Companies are assigning appraisals to individuals quite some distance from the property to be appraised.

Lenders, instead of contacting appraisers directly, now must deal with nationally approved firms. Crowley says: "An appraisal was supposed to be done in Tampa. It was sent to a person in Panama City. We had an appraisal in Parrish and a Miami appraiser was assigned to that."

For you non-Floridians, Panama City is 390 miles from Tampa!!

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and Miami is 246 miles from Parrish!

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