The Home Valuation Code of Conduct (HVCC) between lenders and appraisers went into effect June 1st. There’s been many comments about how real estate transactions have been affected in the last month. But when there’s a problem with someone not following HVCC guidelines, where is a complaint filed?
NOWHERE!
That’s right, nobody currently enforces the HVCC. An entity called the Independent Valuation Protection Institute (IVPP) handles complaints. According to the code:
An Independent Valuation Protection Institute (Institute) shall be created as approved by the parties. Subject to section IX, when the Institute is established, the lender will provide information to appraisers and borrowers regarding the availability of the Institute’s services, which are expected to include: (1) a telephone hotline and email address to receive any complaints of Code of Conduct non-compliance, including complaints from appraisers, individuals, or other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, which the Institute will review and report as provided in IV.B(8) and IV.C(2) of this Code of Conduct; and (2) the publication and promotion of best practices for independent valuation. The lender shall not retaliate, in any manner or method, against the person or entity that makes a complaint to the Institute.
But one month later, it still doesn’t exist. Even Fannie Mae and Freddie Mac acknowledge this fact:
The structure of the IVPI has not yet been determined and the IVPI has not yet been established. Therefore, the provisions regarding it in the Code are not yet effective.
So right now HVCC regulation is like speeding on the Autobahn – there’s nobody to tell you not to do it.
