HVCC and Rate vs. Price

This is a topic that just stays in the news (at least in the real estate an mortgage news/publications). As you may know by now, the government has instituted the Home Valuation Code of Conduct or HVCC. With that, Appraisal Management Companies (AMC's), are a third, impartial, party who will arbitrarily choose the appraiser that performs the appraisal on a conventional mortgage. Fortunately, we still don't need this to be done on FHA mortgages.

The government implimented this guideline in an effort to swat the relationships between mortgage brokers and lenders and their friends in the appraisal business because it was felt that they were in cahoots with each other. While that may have been the case a few years ago, the ability to even "stretch the truth" about the value of a home has been curbed by both the current market condition as well as many of the unruly people in the real estate and mortgage industries hitting the door now that you actually have to work to put a deal together.

While the pendulum may have been too far to one side, making it too easy to put a mortgage transaction together, that same pendulum has swung too far in the other direction and made it too hard to put one together, now. Just this week, I spoke to an appraiser who said he has invoices that are well over a month old and is waiting to get paid by various AMC's, so who's really benefitting from this new system?!!

Reps. Gary Miller, R-Calif., and Travis Childers, D-Miss., have introduced a bill in Congress that directs the GSE regulator, the Federal Housing Finance Agency, to suspend the HVCC for 18 months. Trade groups like the National Association of Realtors are fielding complaints from their members and trying to quantify the extent of the problem. The bill is HR 3044 and if you would like your voice heard on this, please visit http://www.hvccpetition.com/ and sign the electionic petition.

Rick Masnyk is Manager of 1st Metropolitan Mortgage's North Smithfield, RI branch and can be reached at 1-888-282-2835 or by visiting www.getanhonestmortgage.com.