Living with the HVCC

The implementation of the Home Valuation Code of Conduct (HVCC) impacts a number of stakeholders in the real estate industry. And as with the implementation of any new program or policy, there is a lot of confusion about what this means to real estate agents and appraisers.

The rumors were rampant. People were concerned that the business relationships that they had spent years building were going away. Appraisal Management Companies (AMCs) were though to be making assignments to appraisers without consideration of their geographic competency. And most important, REALTORS thought that it would be more difficult than ever to contact an appraiser, even to ask them to consider additional data or correct errors in the appraisal report.

To help REALTORS understand the impact, a Regulatory Issues Brief was put together for the 2009 Midyear meetings in Washington D.C. , but many of the REALTORS in the trenches, don’t read those documents, and so the confusion continues. But NAR wasn’t done trying to help us understand the impact of the HVCC.  A page was created on Realtor.org to allow members to view the most up to date information on the HVCC.

But just in case you’re not feeling like checking out www.realtor.org/hvcc, I thought a few of the myths and facts from the site might be useful to you

Myth: The code applies to all mortgages that require an appraisal

Truth: The code only applies to 1-4 family loans sold by Fannie Mae or  Freddie Mac and does not apply to FHA, VA or the Federal Home Loan Banks.

Myth: HVCC Prohibits REALTORS and lenders from talking to appraisers

Truth: REALTORS and lenders can talk to appraisers, including making requests to consider data or correct errors

Myth: Lenders are required to choose appraisers from a rotating rostr approved by Fannie Mae or Freddie Mac

Truth: Lenders may choose to use a rotating roster, but are not required to do so by Fannie Mae or Freddie Mac

Myth: Borrowers must use a credit card upfront to pay for an appraisal

Truth: A borrower is not required to pay for an appraisal with any one particular form of payment.

So in their final analysis, the relationship between REALTORS and appraisers should not be impacted in a negative manner, though we do need to respect the new code, and learn to deal with it.

You do have more options though, including a place to request a reversal of the HVCC – but unless, and until that happens, we need to learn the facts so that we can live with the legislation.