News About HVCC Changes

There was an article in The New York Times last week about the changes to the Home Valuation Code of Conduct (HVCC) that went into effect in May of this year, which we’ve written about here and here. Essentially, the changes say that only lenders can order appraisals and that rather than going to an appraiser directly, they must order appraisals through an appraisal management company.

During the housing boom, appraisers were occasionally under pressure to overlook property defects, which, in turn, contributed to increasing home prices. Ethical appraisers who refused to overlook defects were in danger of losing work and asked for greater enforcement of laws designed to regulate appraising. The HVCC changes were intended to decrease home appraisal conflicts of interest by putting the entire appraisal process in the hands of those most at risk of losing money – the lenders. But the changes designed to solve one problem seem to have created a whole host of other problems. Some real estate agents argue that the changes block home sales and are asking for the changes to be suspended until 2011. Some appraisers feel that the changes, which were meant to help ethical appraisers, actually hurt them by driving business to inexperienced appraisers.

The changes are fairly new and it remains to be seen how they will affect the industry in the long run. To read the full article and learn about the opinions of those affected by the changes, click here. To read a previous post about how these changes affect Present Value, click here.

By: Present Value 

Tags: Add new tag, HVCC Changes, Real Estate Appraisal

This entry was posted on Tuesday, August 25th, 2009 at 4:42 pm and is filed under HVCC. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.