I’ve received a few emails as of late about my my thoughts on HVCC (Home Valuation Code of Conduct) and why I hadn’t written or documented HVCC the way we did HR3915. The truth is that it slipped by me until I got up to speed on the ramifications of HVCC today, even though Paul covered it previously, here. I even remember reading his post, but for some reason the implications didn’t hit until the last day or so. While HVCC serves to do some great things for consumers and the industry, in its current form its negative aspects overshadow the good it does for agents, brokers, consumers, and appraisers.
On Wednesday, the 30th, the feedback period for HVCC is over, so now is the time to express how you feel about the flaws in HVCC. Since HVCC is a bill or legislation going through the Senate and House, it has gotten little to no coverage, whereas if it was a bill, I believe there would be a much larger discussion taking place online and off. Although I am acutely aware that a petition with less then 36 hours to gain momentum is not unlike throwing a life preserver to somebody who’s already 20 feet under water, I still ask in your support in signing the petition. Even though the feedback period is ending, this doesn’t mean that all ears will be closed.
HVCC Basics:
- Disables Brokers from choosing appraisers or having ANY contact with appraisers as these tasks are delegated to lenders. This creates a bias that shifts power to large institutions.
- Requires independent appraisers to join AMC’s (Appraisal Management Companies) where they are forced to pay 40% or more of their income to the AMC, ending the existence of independent appraisers.
- Since appraisals are not in the Broker’s name but the Lender’s, if you or your client needs to change lenders, a new appraisal is required.
- If consumers want to shop their loan, they must pay for a new appraisal, they cannot have appraisal reassigned. This creates a disincentive to shop for the best deal, which is never good for consumers.
UPDATE: Alamode Petition
Alamode CEO, Dave Biggers sent out this email this Morning:
Thank you for submitting your letter to Fannie, Freddie, OFHEO and Attorney General Cuomo yesterday. We understand you may have received a “bounce back” e-mail from one or more of them indicating your electronic submission wasn’t received. Trust me, they got the message.
Yesterday over 16,000 appraisers, mortgage brokers, agents and even lenders (178 of them) logged in and sent their opposition to the HVCC. Apparently the volume caused the servers at Fannie, Freddie and OFHEO to start shutting down. To their credit, Fannie Mae called us proactively and we believe we’ve worked out a compromise that’s easier on their servers, but we haven’t been able to reach technical contacts at OFHEO and Freddie.
We’ve queued all the mail however and will resend as soon as all three have their servers in order and are able to accept the messages and/or posts.
We were surprised that their mail servers coughed up so quickly. We had a little over 10,000 people sign up in the first six hours, and 10,000 messages each should be nothing to these guys. We handle millions of messages a day on our mail servers, with no impact at all. If someone sent us 10,000 messages over six hours, it wouldn’t even register as a blip on our volume monitoring tools.
Regardless, we’re also taking the “official” method and sending paper copies to all the entities. Right now, at more than 17,000 signers, that means over 68,000 pages to print (some span two pages). Last night we printed 55,000 of them and will keep up with the volume as it goes today.
Again, thanks to everyone for all the support. I’m confident we’ll emerge with a set of rules we can live with, rather than die by.
Trace is the founder of LeadPress and helps loan officers generate mortgage leads and learn with FREE Mortgage Tools.
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David, what business are you going into?
After 28 years io business, I will no longer work for banks. I am going to work only for paying non lender clients. A 59% fee cut is what they want and they got it and the low quality they also want. can you beleive one idiot attorney general in NY brought the whole appraisal industry down? The government has screewed me for the late time. They know nothing. Banks and government have destroyed the US and put the quality appraisers out of business. It’ s time to start a class action anti-trust suit against banks and the government. Since you can’t get appraisers to join a Realtors type organization, the game is over.
To answer your question Randy, we have moved into day trading. I recently read that the average person has a 90% chance of losing their butt in the daytrading business. To me, that means there is a 10% chance of doing well. Those odds of success are around 10 times better than what exists for the future of appraising. I don’t believe the odds for failure would be nearly that high for experienced appraisers however because they have spent years weighing risks and sorting out reality and probability from pie in the sky values.
The current market is certainly a plus for beginning daytraders because I am confident that the worst of the bad news and surprises are behind us. Smart appraisers who have lost thousands over the past 18 months would do well to consider using the coming stock market rebound as a tool to rebuild the fortunes they have lost.
On the flip side; I recently read in Fortune magazine that appraising ranked number 4 on the list of Least Profitable Businesses. The article was written prior HVCC. Now that appraisers will be doing twice the work (1004MC) while simultaneously giving up 1/2 of their income to AMCs where do you think the profession ranks on the Least Profiable Businesss list? Number One By A Landslide!
David, what a coincidence… I too am a Day Trader. I have been trading the EMini futures for the past 5 years and also was a full time equities Day Trader during the .COM boom. I will probably be moving to being just a Day Trader and leaving this crappy appraisal business also, once my license expires in December. I wish you lots of luck in your new venture. There is definetely never a dull moment in the stock market. What will you be trading?
I’ll tell you in a few days AFTER I’ve purchased their stock.
I am looking into trading the e-minis as well, through a trainer in Texas… I took the course about four years ago. With appraising going the way it is, eminis looks more lucrative.
Ahhh… I remember trading the minis when we realized they led the normal futures in around 2000 ……. most people hadn’t heard of the minis… nothing like watching the minis pop and taking out all the offers putting in huge bids and then fading out the move up and then getting short (many times on accident depending on the lot sizes we had) and then fading the move down as the slow movers tried to get out of their longs… that was definitely a different time back then… of course that also worked against us… many times I would throw out a huge bid and end up 30 or 40k shares long in addition to my original position… that SUCKED. The market makers had either gotten an order or more than likely figured out what we were doing and just decided to destroy us.
We used to pick a stock and dominate it. I remember my buddy was trading 20% of the daily volume of AMAT at one point in time by himself… insane. We used to listen to another group of traders at the peak of the the boom and they didn’t even bother trading individual stocks, they just traded baskets of stocks in HUGE effing lots…. calling out trades in their headsets and communicating with all of their buddies on what everyone was seeing to try and anticipate up or down swings…
HVCC GET OUT OF THE BUSINESS. THEY MAKE IT WORSE FOR OUT BUSINESS.
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