Sunday, June 28, 2009

An Alternative View of the HVCC

UPDATED!! - Scroll for UPDATE

Peter Miller, a syndicated columnist who appears in newspapers nationwide, also shepherds the Our Broker site. Our Broker is chocked full of advice and information for real estate professionals and consumers.

Like many, Peter has a slightly different view of the Home Valuation Code of Conduct (HVCC) than Appraiser Active. We spend quite a bit of time railing against the HVCC, so it's time to provide some balance. Peter provides that in his recent post How to Pick on Appraisers.

Peter starts off with:

Many in the real estate community are upset with the newly implemented Home Valuation Code of Conduct (HVCC) and want it suspended or revoked so we can go back to the good-old-says when it was okay to threaten and pressure appraisers.
He goes on to say:

There are a number of points under the Cuomo agreement, but three important
items look like this:

___ Mortgage Brokers are prohibited from selecting appraisers. Since the mortgage broker profits when the loan is originated, it follows that such folks are only going to select appraisers who come up with the “right” price valuation.

___ Lenders are prohibited from using “in-house” staff appraisers to conduct initial appraisals. This is a built-in conflict of interest since the lender (meaning, usually, not a mortgage investor but rather a party that originates a loan and then sells it as quickly as possible) wants appraisers to approve any and all deals, otherwise the lender doesn’t eat.

___ Lenders are prohibited from using appraisal management companies that they own or control. This is another overt and obvious conflict of interest

— and still another way to screw buyers who are not getting the protection for which they paid if an appraisal is less than accurate.

The post is worth a read, and worthy of comment. Appraiser Active is interested in your views and encourages your comments here and on Peter's Our Broker site. I've got a few things to say, but have unfinished appraisals all over my desk. As soon as I put a dent in that stack of work, some comment will be provided in an update.


As long as we're looking at all points of view, the comments to THIS POST by Steve Brown, NAR Vice President and Liaison to Committees, has something for everyone! My comment was one of the first, but dozens have been added expressing their view of the HVCC from every perspective imaginable.