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Home Valuation Code of Conduct (HVCC) Information
Posted on May 05th, 2009
As of last Friday, May 1, 2009, the Home Valuation Code of Conduct is effective for single-family mortgage loans (except government-insured loans) that were originated on or after May 1, 2009, and delivered to Fannie Mae or Freddie Mac. The final plan to implement HVCC was announced in December and many real estate stakeholders - including NAR - voiced major concerns that the time frame for change was too short to allow the industry to adapt and thrive. Now that it has been implemented, many REALTORS® and consumers are facing confusion and a lot of unclear and false information.
GAAR contacted Michael Schnetzler, Chairman of the Appraisal Committee to get clear information on what to expect and how to best survive the change to Fannie and Freddie's new Home Valuation Code of Conduct regulations. He stressed that, "Now more than ever, REALTORS® need to develop good relationships with lenders and appraisers. Make sure you're talking to each other." One of the biggest myths surrounding HVCC is that REALTORS® are no longer able to have contact with appraisers. It might be wise to prepare for delays and write longer escrows until the dust has settled and everyone is familiar with new processes. Other feared changes are that the quality of appraisals will suffer and buyer costs will increase dramatically. Although Mr. Schnetzler recognized that these are just speculations at this time, he did agree that they are entirely possible and only time will tell whether these will turn into actual repercussions of the HVCC.
*** UPDATE***
The U.S. House of Representatives is currently hearing a bill to make the HVCC permanent law. An amendment to the bill, H.R. 1728, has been proposed by Rep. Manzullo of Illinois that will put a one-year moratorium on HVCC. The link to the amendment is below, and members are encouraged to call NM House Representative Martin Heinrich to voice their opinions about the HVCC bill.
http://www.rules.house.gov/111/AmndmentsSubmitted/hr1728/manzullo40_hr1728_111.pdf
To view an extensive FAQ sheet from Fannie Mae, click here.
For a wealth of information from Freddie Mac including FAQs, click here.
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Comments (2)
My thanks also. The HVCC has more to do with appraiser selection than communication. Anyone that will profit from a closed loan is not supposed to be involved with appraiser selection.
However imperfect, the new rules are designed to insulate the appraiser somewhat from pressure to hit numbers rather than report more accurate market value. In theory this should improve the accuracy of appraisals, and reward the more diligent appraisers.
on May 08, 2009 at 8:26 am
Thank you to both Michaels for posting this information. Lots of misinformation floating around out there.
Fannie's FAQ isn't perfect, but it's the best we have at the moment. At any rate, it's directly from the source.
Caterina Platt
Evergreen Appraisals
on May 05, 2009 at 12:00 pm
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