This is a follow up to our previous post on What Will Happen to the HVCC?
Speculation is running rampant regarding the future of the Code. We are hearing everything from the HVCC will be implemented with some changes to the HVCC is effectively dead. Rather than try to create my own I’m going to share information on somebody else’s speculation. The folks at K&L Gates are calling into question the viability of the code given the appointment of the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac.
Section 1145 of the Housing and Economic Recovery Act of 2008 authorizes the appointment of a conservator. This section allows the conservator to disaffirm or repudiate any contact determined to be burdensome by the conservator. K&L then asks the next logical question “Why wouldn’t the conservator repudiate the Cooperation Agreements?” The agreements certainly change the standards of whom may perform appraisals. Let’s not forget that Fannie and Freddie are to pay $24 million to fund the Independent Valuation Protection Institute at a time that both GSEs are reviewing every financial decision they make, including charitable contributions.
K&L Gates appears to be offering their opinion rather than speculating on the future of HVCC. They don’t necessarily recommend the repudiation and they make no mention of “inside information” that would indicate it is going to happen. They do raise valid points regarding the agreements, including that the GSEs don’t really need the HVCC to improve the quality of home loan appraisals. At this point it’s all just water cooler talk but it beats talking politics, right?