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November 10, 2010
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July 29, 2010
Obama Eliminates HVCC
President Obama
President Barack Obama, in an effort to reform the financial markets, signed the Dodd-Frank bill, eliminating the Home Valuation Code of Conduct (HVCC) to take effect in 90 days.
The HVCC began in May 2009 and prohibited lenders and third parties from influencing appraisals. The bill forced everyone to utilize appraisal management companies (AMC) in an effort to create a separation between mortgage lenders and appraisers with the hopes of improving the quality control in both industries. By general consensus, this was not the case. The controversial regulation lead to a slew of complaints from independent appraisers who claim they’re being cut out of the market.
Over the next 60 days, the new appraisal independence standards will be written in Congress to replace the extremely unpopular HVCC. These standards will allow Fannie Mae and Freddie Mac to accept any appraisal performed or paid for by a mortgage professional or bank. The standards will also require that lenders and agents pay the appraisers at current market rates. In addition, the existing state and federal restrictions prohibiting mortgage originators from influencing the appraisers in any fashion.
Jason Gonzalez, branch manager of RH Funding Co. in Orlando, a mortgage lender, states, “I, for one am very grateful that the HVCC is set to be eliminated. The initial reform deteriorated the quality of the working appraisers by cutting their fee structure in half. As in any industry, when compensation is affected, the talent pool of that industry becomes very slim and the work tarnished and rushed. This new reform will eliminate these issues and help to expedite the mortgage approval process thereby allowing consumers to close on their homes faster and with less chance of receiving a poorly done appraisal inspection. At RH Funding Co, we strive for excellence and the elimination of the HVCC will allow us to continue to improve our superior level or service. I would like to personally thank all of our clients, both past and present for their continued support.”
source: http://LendingFL.com/blog
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