Dennis Norman
07/17/10-Correction –This past week Congress passed H.R. 4173,the Wall Street Reform and Consumer Protection Act which is the most comprehensive reform to the banking industry since the Great Depression. The bill now awaits President Obamas signature which is expected to happen in the coming week.
This is a very comprehensive bill and I’m not sure even the Congressmen that passed it know everything that is in it,so I’m certainly not going to even pretend to know that much about the bill,but the one thing I do know is the Home Valuation Code of Conduct (HVCC) is dead. It’s been a while since I have written about HVCC but to refresh everyone’s memory HVCC is something has wreaked havoc with home buyers,REALTORS and appraisers. HVCC,which went into effect on May 1,2009,has caused issues and confusion in the real estate industry and among professionals in the industry.
Killing HVCC will be,in my opinion,be a positive thing for the real estate market.
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Dennis………..I believe you have ‘jumped the gun.’The President has not yet signed this bill,and in fact,the White House plans a major media event next week to focus on that.
Secondly,while the verbiage in the bill does eliminate the HVCC,new regulations very similar to it will be enacted as a result of the bill.
We don’t know yet what the regulations will contain because they have not been publicized,and the bill is not yet ‘law.’The new regulators have been identified by agency,but they have not yet met to begin the new process outlined in the bill.
Dave,thanks for pointing out my error…that’s what I get for doing a post too late at night and when I’m tired:)
You are correct,the President has not signed the bill yet…it has just been passed by Congress at this point…I had check the White House website before writing the article and I mes-read a press release….
As far as whether it is going to ultimately be good for appraisers or not I guess time will tell…I don’t profess to know all the effects and ramifications of what is in the bill,I just know it does kill HVCC. Whether or not it will ultimately be good for appraisers I guess time will tell…from what I’ve gathered it seems many in the industry view elimination of HVCC as a positive but has skepticism about the overall effect of the bill….It seems the appraisers are more excited about the new Fannie Mae rules that goes into effect Sept 1st that prevents lenders from changing the value an appraiser puts on a property.
Thanks again for bringing my error to my attention and for the comment…(now I feel as good as traditional media….I can report things inaccurately:)
Take care,Dennis
The bill does NOT repeal HVCC.
It “sunsets”it but it still requires lenders to order appraisals and have AMC prevalent in the process.
The only difference from today is that the appraisals would be portable.
Since NAMB is trying to set up their own AMC,they lobbied Congress to not repeal it.
The law will still make the actual appraisal beg for work and get paid a lower amount.
I am on blog/forum with hundreds of appraisers across the country. We all support the elimination of HVCC. If Fred is correct a enhancement or sunset however its phrase does no good to the working appraiser. From what I’ve read the only proposed difference to HVCC is that the appraisals are portable,AMC’s are still involved,lenders still have to order the appraisal. The original bill was # Bill 4312. Again we don’t know what is in the actual bill(regarding HVCC) before the President but at least we can Hope!
Fred and Andre- Thanks for the comments…I understand your concerns about the bill and appreciate you raising the issue…what are your thoughts on the new Fannie Mae rule going into effect Sept 1st that no longer will allow a lender to adjust the appraisers value? This seems like a good move to me,do you agree or are there other issues tucked away in the rule change that are not appraiser friendly? Thanks,dennis
In regards to the new Fanny Mae guidelines I believe that this is long overdue,with the past pressures of lenders requesting appraisers to change the values of their reports. This is a step in the right direction and with guidelines and laws such as this,there would be no need in retrospect for HVCC to exist. I do believe however that there should be some rules to guide or advise appraisers,brokers as well as lenders.
OK now the bill is signed…..so WHAT. Mortgage brokers have become orginators for banks and independent appraiser’s are becoming “STAFF APPRAISERS”. Cuomo,DODD and Franks hijacked my appraisal busines/industry for votes and profit and we appraisers just sat around and watched it happen. We got exactly what we deserved for sitting and watching.
The info below was cut right from the bill. Is there any chance that these provisions could be taken out during Senate negotiations? I wouldn’t be suprised if they did,it is too good to be true (at least as far as the “favorable fees”and “not asking appraisers to change their info”…just wondering!
13 SEC. 4312. APPRAISAL INDEPENDENCE REQUIREMENTS.
14 (a) PROMULGATION OF NEW REQUIREMENTS.—The
15 Director shall lead a Negotiated Rulemaking Committee
16 under the Federal Advisory Committee Act and the Nego
17 tiated Rulemaking Act to promulgate appraisal independ
18 ence requirements for residential loan purposes,and such
19 Committee shall promulgate such requirements not later
20 than the end of the 60-day period beginning on the date
21 of the enactment of this title.
22 (b) CERTAIN REGULATION REQUIREMENTS.—Regu
23 lations promulgated by the Negotiated Rulemaking Com
24 mittee under this section—
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824
•HR 4173 IH
1 (1) shall not prohibit lenders,the Federal Na
2 tional Mortgage Association,or the Federal Home
3 Loan Mortgage Corporation from accepting any ap
4 praisal report completed by an appraiser selected,
5 retained,or compensated in any manner by a mort
6 gage loan originator—
7 (A) licensed or registered in accordance
8 with section 1501 et seq. of the SAFE Mort
9 gage Licensing Act of 2008;and
10 (B) subject to State or Federal laws that
11 make it unlawful for a mortgage loan originator
12 to make any payment,threat,or promise,di
13 rectly or indirectly,to any appraiser of a prop
14 erty,for the purposes of influencing the inde
15 pendent judgment of the appraiser with respect
16 to the value of the property,except that nothing
17 in this section shall prohibit a person with an
18 interest in a real estate transaction from asking
19 an appraiser to—
20 (i) consider additional,appropriate
21 property information;
22 (ii) provide further detail,substan
23 tiation,or explanation for the appraiser’s
24 value conclusion;or
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825
•HR 4173 IH
1 (iii) correct errors in the appraisal re
2 port;and
3 (2) shall include a requirement that lenders and
4 their agents compensate appraisers at a rate that is
5 customary and reasonable for appraisal services per
6 formed in the market area of the property being ap
7 praised.
8 (c) SUNSET.—Effective on the date the appraisal
9 independence requirements are promulgated pursuant to
10 subsection (a),the Home Valuation Code of Conduct an
11 nounced by the Federal Housing Finance Agency on De12
cember 23,2008,shall have no force or effect.
What a great way to generate billions off of appraisers.
Why kill the golden goose?
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