HVCC: The Comp Check Killer
In a recent blog post, “Comp Check: The Code Red of Real Estate Appraisal,” we discussed the dubious practice of comp checks, and promised a future blog with an overview of new laws that were enacted to prevent comp checks. The future is now.
Just a short recap: A comp check is something a lender requests of a real estate appraiser. It’s essentially an undocumented, unofficial examination of properties similar to one that’s on the market. If the comp check matches the price range the lender was hoping for, the appraisal goes through official channels. If not, the matter is dropped and the appraiser gets nothing. Except the promise of future work from the lender.
So what’s been done to put a halt to this unethical practice? The passage of the Home Valuation Code of Conduct (HVCC). Almost a year ago, New York Attorney General Andrew Cuomo announced an agreement with Fannie Mae and Freddie Mac to establish the HVCC. Right out of the gate, the HVCC reads, in part:
“No employee, director, officer, or agent of the lender … shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner … “
This would appear to be nothing but good news for appraisers. Well, yes and no. HVCC seems to have caught lenders off guard; many are unsure how to be HVCC-compliant. This is driving lenders to stop using independent appraisers and start using appraisal management companies (AMCs). Some lenders even believe that HVCC requires them to. But this means that most independent appraisers are being punished for the actions of a select few. And anyway, using an AMC doesn’t guarantee HVCC compliance – a great number of AMC appraisers either were or will be independent appraisers.
So does the passing of HVCC mean that comp checks are a thing of the past? Of course not. Speeding is against the law. Will everyone drive the speed limit? The one thing HVCC will do is make this gray area a little less so. Lenders who attempt to have comp checks done will now be in violation of HVCC, so they’ll likely think twice about asking for them.
By: Present Value
Tags: AMC, comp checks, HVCC
8 Responses to “HVCC: The Comp Check Killer”
Leave a Reply
Recent Posts
Categories
- Appraisal Terms
- Asset Inspection
- business appraisals
- business broker
- Business Valuation
- Buying a Business
- C Corp to S Corp Conversion
- Case Study
- Certified Machinery and Equipment Appraisers
- Custom Appraisal
- economic stimulus package
- equipment appraisal
- Equipment Auctions
- estate planning
- Fannie Mae
- FHA Loans
- Freddie Mac
- Goodwill
- HVCC
- Intellectual Property
- Inventory Control
- loans
- Machinery & Equipment
- Machinery & Equipment Appraisal
- Press release
- Public-Private Investment Program
- Real Estate
- Real Estate Appraisal
- Sample Reports
- SBA
- SBA SOP changes
- small business
- Small Business Administration
- small business loan incentives
- succession planning
- Tax issues
- Uncategorized
- Valuation Fraud
- Videos
Tags
Recent Comments
- William on Cover Your Assets: Divorce Appraisals
- Alison Shuman on Private Mortgage Insurance
- In theory (disregarding any other marketplace variables), the proceeds from sale of a bond will be equal to? | Structured Settlements on Much Rejoicing as Financial Reform Bill Passes
- Dorinda Sahota on Uniform Residential Appraisal Report
- registry cleaner on Appraisal Organizations Address Letter to the FHA
June 5th, 2009 at 11:27 pm
http://www.hvccpetition.com
Removal of the corporate independence rule within the HVCC was a crime against the public.
1 bad appraiser = 100 bad reports
1 bad AMC = 10,000 bad reports
These rules ensure collusion on a massive scale.
August 27th, 2009 at 9:08 pm
after doing and an appraisal, the value was not what the lender wanted and sent over 10 properties by the amc
broadway valuations to make me check the other comps which I did and complained. Tom at broadway the manager nastly stated to me you mean this is the first comp you were asked to run I said you are trying to get the value up. and these comps are from a high value greater than subject.
I had to do it and changed one comp of a higher value then adjusted it so the value came back down.
they were so mad with me that I will not get anymore work and may not get paid for what i have done
who can I report them to.
January 6th, 2010 at 2:54 am
could a person ( possiblly an appraiser ) set up another busines to comp check like say:- Zillow. trulia and other comp checking websites.. that would not be affilated with the loan process of a lender or the bank to do a valuation so to speak and get paid for the services. There would be no connention between the comp checker and the transaction whatsoever. Does anyone think this will work? business is slow and alternative are prosenting themselves. Pleasse any feed back would be great…
February 27th, 2010 at 5:18 pm
Good post – and good domain by the way!
March 22nd, 2010 at 3:21 pm
[…] http://www.presentvaluellc.com/valuationexperts/2009/05/28/hvcc-the-comp-check-killer/comment-page-1/ – Present Value Blog » Blog Archive » HVCC: The Comp Check Killer… We understand and appreciate your business and problems. We know that your business is greatly dependent on image, the public’s perception of you and your good service. …Bookmarked and Pinged by http://www.imagebuilderads.com/ [...]
April 1st, 2010 at 3:37 pm
Yo, foreclosures aren’t all the fun but are fun to invest in. I hope they will do something about the economy.
May 21st, 2010 at 2:38 pm
Howdy there,Terrific blog dude! i am Tired of using RSS feeds and do you use twitter?so i can follow you there:D.
PS:Do you thought to be putting video to your blog to keep the readers more interested?I think it works.Best wishes, Billye Stefano
May 23rd, 2010 at 3:20 am
hey, I added ur site to my RSS reader. the posts are awesome!