Home Valuation Code of Conduct “start date” will be delayed

The Director of the FHFA, which oversees Fannie and Freddie, says he expects the HVCC to be released shortly. However, the start date of the HVCC will be delayed:

Separately, an agreement to reshape the appraisal industry is being delayed up to three months, a federal regulator said Thursday.

James Lockhart, director of the Federal Housing Finance Agency, told the House Financial Service Committee that the agreement with New York Attorney General Andrew Cuomo will be delayed from its original Jan. 1 start date. While the agreement should be finalized in the coming weeks, “it’s taken us longer than we expected to do it,” he said.

I’m not sure exactly what’s holding up the Agreement, but its looking like some type of HVCC is going to be released soon.

Hat Tip: Appraisal Scoop

  1. Laurel Little

    This is going to kill the appraisal industry and cost borrowers more money because the appraisal management companies are part of the problem NOT part of the solution. They are penalizing the good appraisers instead of rooting out the bad ones.

  2. Diana Meeks

    Who is going to watch over the AMC’s, I agree, they are penalizing the good appraisers and letting a middle man take our earnings.

  3. Dean Spear

    Not to worry! Now that congress has passed the giant “bail out”, I’m sure we’ll have sufficent oversight and your dollar will be worth much more! Let’s all give AMC’s and management companies more of our hard earned money. Must be time to get out of this business.

  4. Jack Wu

    If we have to join the AMC, the appraisal business is not a free industry anymore.


    I have worked with amc’s for over 15 years now and I see good and bad. It depends upon the strength of the AMC.If appraisal assignments are set up much like FHA and VA originally was, it would be great. We would all have enough work to stay busy as it would be strickly who’s number rolls up next from their list and not a few pets getting all the work because the branches like them better. I do not have to solicit business, it comes to my computer daily. I can accept or decline and not fear I will not have more work. Making the AMC’s independent of the lender is a good thing in the long run.

  6. Steve Filipovich

    Please consider the AMC in the Home Valuation Code of Conduct
    Why are you handing the keys to the mortgage industry to the AMC’s?
    If you do not think lender pressure is “passed-thru” the AMC’s to the appraiser you are not considering the issue. The AMC’s can create an unregulated choke point in the process that will eliminate the appraisers that do not play along.
    Certain requirements by AMC’s for commitment to short turn times for completion of appraisals prior to the appraiser viewing the property, causes pressure on the appraiser to complete the appraisal in a time frame that may be too short.
    Three or five phone calls, emails, etc in a day from the AMC to check when the appraisal report will be completed may cause some appraisers to complete the appraisal in a careless manner, resulting in a misleading report. Some reports take additional time to complete.
    Many of the AMC’s sell turn times to “their clients” (should be the appraiser’s client), treating the appraiser in the manner of an employee of the AMC, not an independent contractor as set out in the IRS rules to the lender (appraiser’s client). Most of the AMC’s keep track of the appraiser’s turn times and assign future reports based on how fast the appraisal is completed. In my State, the department licensing appraisers has, in the past, considered completing an appraisal assignment in a very short period of time is evidence of the appraiser being careless.
    AMC’s should be paid a fee from the lender with the appraiser receiving payment direct from the lender (client). The AMC is not the appraiser’s client.
    The current method has the lender collecting a fee from the borrower, and then it gets split-up between the AMC and the appraiser. If the lender owns the AMC, it appears the lender is getting a kick-back on the appraisal fee.
    This system has lowered fee income to the appraiser, encouraged the appraiser to complete the appraisal as fast as possible resulting in pressure to lower appraisal standards to make real estate appraisal work a profession.
    The review of the appraisals in the AMC setting is by persons that do not have an appraisal license or are not licensed in the State the property is located. In some cases a computer may be the reviewer. If the AMC is selling services that indicate the appraisal report is reviewed, it should be reviewed by someone who has been licensed and trained in real estate appraisal work in the State the property is located.
    Since the appraisal is completed for mortgage purposes for a client and now we have intended users of the appraisal (borrower’s copy). There should be a large disclosure to the intended users that the appraisal is for mortgage loan purposes and should not be used for other purposes without consent of the appraiser.
    The appraisal is prepared for the client (lender) who is experienced in the use of appraisals. The lender client has certain requirements in the appraisal report that the intended users may not understand. Appraisals are prepared at different levels for different client needs containing different types of information depending on the scope of work agreed upon between the “client” and the appraiser, not the intended user and the appraiser.

  7. Let’s do the math. Avg residential appraisal salary = $40,000 (salary.com) less 30% expenses less 50% AMC fees = $14,000/52 wks/40 hrs = $6.73 per hour. Don’t forget this phrase … “Do YOU want fries with that order?”

  8. Mark W

    I have spoken to several appraiser friends today (12/10) Its already starting (HVCC) Several of the large banks have already taken the stance that they will be doing the appraisal ordering. This is going to take the small honest appraiser completly out of the picture. This has to be stopped! I know I’ll will be standing in the unemployment line come Jan 2, what about the rest of you?

  9. Curt Studebaker

    I know this sounds financially impossible for the majority, but think about the effect it would have on the AMC’s and their clients if the appraisers, nationwide, decided to take the month of March 2009 “OFF” “STRIKE” from accepting orders from any AMC. The client who works on commission would likely have to contact a ” LICENSED APPRAISER” . This might send a message to the AMC’s regarding the appraiser’s fee. 30+ days without an appraiser to complete their needs, that could hurt!!
    If we, the appraisers don’t start working together as an industry, this is what we have to look forward to, AMC’s.
    United, we can accomplish many things, as individuals, blogging our complaints and hoping someone will wave their magic wand is just wishful blogging, but it’s a start.

  10. Wayne S Gerald

    Most 95% of HVCC is good but the AMC’s want those couple of lines under Appraiser Engagement to give them the ultimate power to be the middleman or broker of our services.
    If the HVCC alows them this power their pressure for speed and price will further erode appraisal quality, independent thinking, and our incomes.

  11. Anonymous

    This not going to help the market at all. The increased cost and turn time will be more to turn nervous buyers off. This is our tax dollars hard at work. There will be alot of wasted money on deal that die because of appraisal issues. I am sorry but increasing the cost for a borrower helps how? But these management companies make money and increase there bottom line.