Working with HVCC Regulations

A recent article in Banker & Tradesman suggests that consumer confidence in the real estate market is coming back. Coming out of the 2009 Realtors Conference & Expo in San Diego, the article indicates that in spite of the decline of the market, buyers are still looking for vacation and recreational properties.

Industry experts, however, still appear to be concerned about issues surrounding real estate appraisals and the unintended consequences of the implementation of the Home Valuation Code of Conduct (HVCC). As we have discussed in other blog posts, the perceived problem is that appraisers, working for appraisal management companies, are often working outside areas with which they are familiar and may not have access to information about specific markets. Realtors argue that as a result of valuations that sometimes are too low, sales have been delayed and even cancelled.

This Banker & Tradesman article provides some interesting suggestions by realty agents of ways to work with the HVCC changes, including providing appraisers with detailed property comparison information and background materials to help appraisers achieve the most accurate appraisals.

As always, Present Value LLC is both an appraiser and an appraisal management company, which means that it can play the role of the third party required by the HVCC changes and save you the step of having to seek out a separate appraisal management company.

By: Present Value

Tags: HVCC, HVCC Changes, present value, Real Estate Appraisal, Real estate appraisals
Posted in HVCC, Real Estate, Real Estate Appraisal | 2 Comments »

Recent Articles About HVCC Changes

We’ve written several posts this year about the HVCC changes and how they affect the appraisal industry. You can read those articles here. Over the last two weeks, there have been a couple of articles written about how those changes affect not only appraisers, but home owners.

The Seattle Times published an article that followed one appraiser’s experience of the industry before and after the HVCC changes designed to keep brokers and appraisers from working too closely together went into effect. For this particular appraiser, appraising is a family business and he describes not only his worries for the industry as a whole, but his personal pain as he watches the HVCC changes’ negative effects on the industry he loves.

The article in The Seattle Times briefly mentions the effect of the HVCC changes on consumers, but another article published in the Chicago Tribune goes into a more in-depth exploration of consumers’ worries. This article discusses a man’s experience selling his home in Massachusetts. He had a successful sale, but found that the HVCC rules designed to protect him made the experience more stressful than it had to be.

To read the article in The Seattle Times, click here. The Chicago Tribune’s article can be found here.

By: Present Value  

Tags: HVCC, HVCC Changes, present value, Real Estate Appraisal
Posted in HVCC, Real Estate Appraisal | 2 Comments »

Appraisal Organizations Address Letter to the FHA

A number of appraisal organizations, including the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers, released a memo to the Federal Housing Administration (FHA) regarding the Home Valuation Code of Conduct (HVCC) and FHA’s possible adoption of elements of the HVCC.

The letter calls the FHA to enhance appraiser independence and to more closely monitor mortgage brokers and appraisal management companies. Below are the specific, overarching recommendations made in the letter:

• Recommendation 1: Establish the conditions for mortgage broker participation in the FHA appraisal ordering process.

• Recommendation 2: Supplement state and federal appraiser independence requirements with more robust appraiser independence requirements specific to FHA.

• Recommendation 3: Rescind Mortgagee Letter 97-46.

• Recommendation 4: Develop rules and expectations relating to appraisal management companies.

To view the full letter to the FHA, visit the Appraisal Institute website, here.

To view Present Value’s previous blog posts on HVCC changes and industry reactions, click here, here, and here.

By: Present Value

Tags: Appraisal Institute, Appraisal Terms, FHA, HVCC, HVCC Changes
Posted in Appraisal Terms, HVCC | 4 Comments »

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
Posted in HVCC | 1 Comment »