- Image by enignot via Flickr
Well, the Home Valuation Code of Conduct (HVCC)–the brain-child of New York Attorny General Andrew Cuomo–is fully underway in the mortgage and real estate market.
I thought this would be a great time to survey (Google-style) loan officers and real estate brokers.
Here are a few of the most interesting:
- Brian Brady’s first HVCC customer under the new Code of Conduct got saddled with a $1392.50 appraisal fee. Consumer protection at it’s finest! Send your thank-you letters to Attorney General Cuomo, Fannie Mae, and Freddie Mac.
- Rhonda Porter explains HVCC to a Real Estate agent, “No I don’t know who the appraiser is, or when it might be done.” Consumer–keep your schedule open we could be closing any week now, or not.
- Even the Title/Appraisal Vendor industry is having second thoughts about HVCC and its real impacts.
- Housingwire.com reminds lenders that despite your best efforts you still may not be HVCC compliant.
- However, some technology vendors and appraisers see opportunity in HVCC.
Updates from Loan Officers, Real Estate Brokers, and Appraisers
If you have already blogged you experience with HVCC–DM me on Twitter with the link and I will add it here ASAP.
- How Will the Home Valuation Code of Conduct (HVCC) Impact Las Vegas FHA Loans? (FHA Mortgage)
- HVCC: Eyes Wide Shut (Arizona Mortgage)
- Will HVCC create appraisal nightmares in the future? (Phoenix Real Estate)
Community What is REALLY going on with HVCC?
I would love to collect feet on the street feedback on the operational reality of HVCC–loan officers, appraisers, real estate brokers, home buyers, homeowners.
Please add your perspectives as a comment.
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I just love that photo–pretty much sums up HVCC!
Isn't that priceless! Flickr is great for finding the most appropriately ridiculous photo for any story
Just a complete nightmare from what I hear from some of the guys in our office. I try to do nothing but FHA. So, it really has not affected me so much. If I can't fit it into the FHA mold, I hand the deal off. I do not want the headache.
I am lucky, I guess.
Dave,
I am hearing similar gnashing of teeth around. Not as many specific stories though.
It will be interesting to see how this plays out.
HVCC is currently inefficient. It's being run like the VA appraisal system but without the oversight of the VA.
I don't HATE the assignment to random appraisers (but I don't love it). I don't HATE the fact that I should have no communication with the appraiser (but I don't like it). What I hate is that there is no service provider accountability. I know EXACTLY when I can expect a VA appraisal, a LAPP (or VA) issuance of the NOV, and when and how they expect to be paid.
Thanks for the mention on this article, Bill. I agree with Brian in the fact that I don't necessarily hate everything about it, but I don't love it either.
Actually, the only good that is going to come out of the HVCC is that I won't be put in the position of explaining to my clients and agents about why I wasn't able to bring in value on their deal. For some reason, everyone expects the lender to have an aggressive appraiser who can make things happen.
Unfortunately, our clients are going to pay a large price for what use to be considered common practice by some.
Good call on the FHA, Dave, but we might see the same thing through HUD as well.
Fortunately, since the majority of new borrowers thus far in my neck of the woods; the Inland Empire area of San Bernardino County, California; generally meet FHA guidelines, we haven't had too much trouble with meeting the appraisal guidelines.
Bill,
There are many things I don't like, and many things that are “okay.”
I've got a post set up to run on Tuesday in greater detail about it on Straight Talk About Mortgages.com
Tom
Bill,
The early opinions are in and HVCC hasn't convinced too many of us in the industry. So far the biggest loser seems to be the mortgage applicant who has seen his appraisal cost go up 20-30%. Let's give it a few more months to marinate and then we know more about it.
I will definitely take a look at the post, and Lenderama readers should too.
It will be interesting to see what a larger lender is experiencing with HVCC. The general sentiment was that big banks would experience less impact, versus independent mortgage brokers.
Tom, you always give us the straight talk!
We have been using Appraisal mgmt firms for some time now, easier for us to manage one or two contacts vs individual apprasiers in each county/state etc. it also adds a level of review and accountability, and I can trust that the E and O coverage they have is a real policy not the fake ones many small apprasers have. I have not seen costs increase due to this – we still pay 275 to 450 for an appraisal on 650k home or less in populated areas. Certainly a more difficult policy for brokers then bankers….
Owen, thanks for the comment.
I think scale of the mortgage business will certainly have a lot to do with the negative or positive impact of HVCC. Could getting bigger be the answer to changes in the mortgage industry?
Some of these new legislative and regulatory shifts in the market seem to be favoring larger originators. I think it would be valuable to have you post to the Lenderama community about your move from “beer money” broker to serious mortgage business.
I know you have posted the story and the philosophy on your blog in the past. I think that would be very interesting to the Lenderama community–full of mortgage originators aggressive about success!
got it – tough times for all shapes and sizes.. plenty of opportunity but lots more hurdles to jump over to get to it.. will see about a post or two.
thanks
What we have been seeing is an ultimate higher cost to the client in the following ways…
1. Higher appraisal fees
2. Longer turn times and locking out 45-60 days which in some case has been an extra 25 to the rate. Calculate that over 30 years on a $300,000 deal.
3. And most suprising is that some appraisers were actually on the black ball list for lenders, now are doing reports.
4. Appraisal quality has been down
Other than that it is just another sunny day !
Bill,
I just posted a blog about HVCC and a Petition that has over 14000 voices already in less than one week. I am a contributor on Mark Madsen's FHA Mortgage Blog. The blog is complete with a video, direct link to the petition so you can see all the comments by each voice, and a description of how it negatively affects all of us. I tried to DM you on Twitter but for some reason I'm unable to, I'll keep trying there to. Appreciate the help.
Disgruntled real estate professionals are proposing reforms to the reforms, including an 18-month moratorium on the Home Valuation Code of Conduct. How about building a database, fed by Realtors, to ensure accuracy.
Some homes with dead lawns and ratty roofs sell cheaply, but by the time the appraiser uses them as comps they've been repaired. The appraiser might assume the home was pristine at the time it was sold, and that it's low price was reflective of the overall market.
One further wrinkle: To win the business of banks, some of the appraisal management companies offer clients guarantees that homes they appraise won't fall into mortgage default. That means it's sometimes better to err on the low side.