APPRAISALS: What is HVCC and its impact?
Effective May 1, 2009 all lenders across the US must order appraisals for conventional loans (not FHA) through an independent 3rd party company. in other words NO LENDER is allowed to order an appraisal directly.
This system is known as HVCC which stands for Home Value Code of Conduct. To giv ethe background first, it was mandated by Fannie Mae and Freddie Mac after the Attorney General for New York State, Andrew Cuomo, forced it upon them (and not just for NY but for the WHOLE COUNTRY!)
It was Mr Cuomo's opinion that the appraisers were substantially responsible for the housing meltdown. No doubt there were a few bad actors, but we long term professionals immediately saw that this was nothing but scapegoating at its worst.
There were already other safeguards that could have been utilized to insure quality appraisals including reviews and AVMs (Auomated Valuation Models). Ignoring these logical solutions Mr Cuomo didn't just shoot the proverbial 'fly with a cannon' he hit it with a nuclear bomb.
The new HVCC system has caused extensive delays (which has cost many borrowers money in extension fees) , shoddy work (poor 'comparable' properties), and extra cost (as those middle-men are now eating up the apprasial fees so those fees have gone up. This poorly thought out plan (HVCC) has been an unmitigated disaster and is profoundly anti-consumer.
A bill has recently been introduced in the US House of Rep and i encourage all people to contact their representative in support (real estate & mortgage professionals as well as the general public).
The reasons for the housing meltdown were many but this HVCC "solution" is anything but a solution and needs to be abated at once.
If you plan to buy or refinance using conventional loans be sure to consider a protracted period to close, so long as this HVCC system is in place. and DON'T BLAME YOUR LENDER OR BANKER; THEY DIDN'T CAUSE IT. Blame Mr. Cuomo. One more example of puttingsomeone in charge of business who has never run a business. Contact me at vince@firstcaplend.com for more info
This system is known as HVCC which stands for Home Value Code of Conduct. To giv ethe background first, it was mandated by Fannie Mae and Freddie Mac after the Attorney General for New York State, Andrew Cuomo, forced it upon them (and not just for NY but for the WHOLE COUNTRY!)
It was Mr Cuomo's opinion that the appraisers were substantially responsible for the housing meltdown. No doubt there were a few bad actors, but we long term professionals immediately saw that this was nothing but scapegoating at its worst.
There were already other safeguards that could have been utilized to insure quality appraisals including reviews and AVMs (Auomated Valuation Models). Ignoring these logical solutions Mr Cuomo didn't just shoot the proverbial 'fly with a cannon' he hit it with a nuclear bomb.
The new HVCC system has caused extensive delays (which has cost many borrowers money in extension fees) , shoddy work (poor 'comparable' properties), and extra cost (as those middle-men are now eating up the apprasial fees so those fees have gone up. This poorly thought out plan (HVCC) has been an unmitigated disaster and is profoundly anti-consumer.
A bill has recently been introduced in the US House of Rep and i encourage all people to contact their representative in support (real estate & mortgage professionals as well as the general public).
The reasons for the housing meltdown were many but this HVCC "solution" is anything but a solution and needs to be abated at once.
If you plan to buy or refinance using conventional loans be sure to consider a protracted period to close, so long as this HVCC system is in place. and DON'T BLAME YOUR LENDER OR BANKER; THEY DIDN'T CAUSE IT. Blame Mr. Cuomo. One more example of puttingsomeone in charge of business who has never run a business. Contact me at vince@firstcaplend.com for more info
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