Stan Suther's Real Estate and Stuff

Talking recently to Andrea Kindley of Starkey Mortgage (704.902.6371)about the slowdowns in loan processing due to the Home Valuation Code of Conduct that went into place on May 1, 2009, she said that some loans require the lender to go through a third party, called an Appraisal Management Company, to select an appraiser, and others do not.  “We lenders are required to use the HVCC Appraisal Desk on Conventional Loans but can still use FHA and VA Appraisers for Govt Loans, and we can also choose our own Appraisers on all Jumbo Loans,” she said.  The Home Valuation Code of Conduct was put into place to ensure that for covered loans, the appraiser will be totally objective in placing a value on the home.  HERE is a link to the Freddie Mac site that describes the HVCC.

In the meantime, due to continued complaints from REALTORS and others about the effect the HVCC has on getting our business done, the National Association of Realtors on July 23 issued this statement: 

“NAR and our 1.2 million members are pleased that the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to take action to clarify confusion over the new Home Valuation Code of Conduct for home appraisers implemented this past May.

“Our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area. The ramifications were so great to our members and to the housing industry that I personally met with the New York Attorney General’s office and with the head of the FHFA to share our concerns.

“In those meetings I shared an NAR survey that found 76 percent of our members, representing both buyers and sellers, had experienced an increase in appraisal time since the new HVCC rules were enacted. Similarly, 71 percent of Realtors® noted an increase in the use of appraisers who were not from the local area. These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates. I expressed our serious concern in the meetings.

“We took this information, and our concerns, to those organizations responsible for the changes and we are pleased that they listened. Today Fannie Mae and Freddie Mac issued clear guidance on two very important points that we raised in our meetings. First, the guidance states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talking to real estate agents.

“NAR has asked Congress and the FHFA to immediately implement an 18-month moratorium on the new HVCC rules to further address unintended consequences of this new rule. We will continue to push for this, but are pleased that this first step was taken today.”

Stay tuned to see if we can get things moving along a bit better.