Stop the HVCC!
The Home Valuation Code of Conduct (HVCC) is now one month old and already wreaking havoc on the industry! The HVCC was a knee-jerk reaction to curb abuses in the mortgage industry. In typical political fashion, the focus was placed on the wrong area within the industry. The falling home prices that almost everyone has been experiencing were not caused by fraudulent appraisals, coerced values, or appraisers chosen by mortgage companies!
The ease of obtaining money, lack of credit standards, and expectation of double digit rates of return are the reasons for the economy being where it is today! Not the appraisals. Greed has put us where we are.
We need YOUR help! This is not just a call to action for the industry, this is also a call to action for anyone that wants, needs, or has a mortgage! The HVCC is bad for the economy and will further erode the values of properties if it is left in place.
Why is the HVCC bad?
1. In a lot of areas in the country, appraisals are now costing the consumer more money! Under the HVCC, specific rules have been created in order to ensure that appraisals will be randomly or independently assigned. This has created a need for Appraisal Management Companies (AMC). The AMC’s are charging a higher fee and paying appraisers less money in order to retain a portion of the fee for their “management” role.
2. Did your loan get denied? Now you have to pay for another appraisal for the new lender! Sure, the HVCC allows for portability of appraisals. But the lenders are not accepting them for fear of violating the rules of HVCC!
3. Qualified and experienced appraisers have been refusing to sign up with the AMCs and work for less money! Often times, the fee that the AMC will pay an appraiser is up to half of their typical and customary fee. Therefore, a lot of good, qualified, and experienced appraisers are not willing to sign up and work for less money. (No, this is not a case of the appraisers being greedy. Appraisal fees have remained stagnant for close to 10 years.)
4. The appraisers that are willing to conduct appraisals for a smaller fee will either have less experience or have less desire and motivation to properly research the property! This is not a slam on appraisers. But, unless you live in a cookie-cutter suburban neighborhood where values are stable, the proper research and care in determining a value on your property may be compromised. Inexperience and less pay can create inferior quality of work. And this is even more important if you have a unique home or property that requires proper research.
5. When using AMC’s, the management company may not be choosing an appraiser that is familiar with the local neighborhood! AMC’s are supposed to alternate the selection and assignment of appraisers. Therefore, we may not be able to use the appraiser that is intimately familiar with your neighborhood because he is not “next on the list”.
6. There will be fewer appraisers entering the industry; and the ones that do enter, may have lower quality training as we can no longer count on them being trained by the high quality, experienced appraisers! The appraisal industry is one of the few industries that still exists with an apprenticeship training program. Under the old rules, an appraiser did not mind giving up 30-60% of their fee in order to teach the trade to an apprentice. Under the HVCC, their pay has already been cut. Therefore, appraisers are not willing to further cut their pay in order to teach the trade to someone new.
We need your help! We need to stop the HVCC!
Please go to this link and sign the petition. Our voices must be heard before the economy suffers further erosion.