The Center for Public Integrity has posted a great report on the developments of the appraisal profession over the last few years.
The report discusses how appraisal pressure has influenced the housing market and includes this section on the Home Valuation Code of Conduct:
Appraisers who work for themselves or small businesses say the code will end their careers since mortgage brokers and other loan generation staff can no longer contact them directly. Instead, they say the code in effect directs all business to appraisal management companies, the unregulated middlemen that are often subsidiaries of lenders.
Appraisers say the management companies passed on pressure from lenders in the past, including in Cuomo’s case against eAppraiseIt, and see nothing in the new code to stop it from happening.
“It’s a bit of irony that the solution is the same thing that got us here,” said Bill Garber, director of government and external relations at the Appraisal Institute, a trade association representing appraisers.
The Home Valuation Code of Conduct, Garber added, is lip service to cleaning up the industry. Appraisal management companies “are just as capable of pressuring appraisers as anyone else.”
Appraisers also dislike the plan because some appraisal management companies take a hefty administrative fee and pay low rates to appraisers, which experienced appraisers say will force them out of the business and turn the industry over to less experienced appraisers who are more likely to make mistakes.
Pressure will still come from the management companies, said Dodd, the Virginia appraiser. “They could give a damn about the consumer. They don’t care if the consumer pays ten, twenty, or thirty thousand more than it’s worth.”
Cuomo hasn’t answered critics of the new code, and his office did not return calls from the Center for Public Integrity.
I’m somewhat surprised the Center for Public Integrity could not find one person to defend the HVCC. Not even Cuomo’s folks want to talk about it?
Here’s how the report concludes:
In February, Miller received a call from a different lender. This one wanted him to remove pictures of a cracked sidewalk he included in his appraisal. This would be prohibited under the Home Valuation Code of Conduct. But Miller expects lenders will figure out a way around the rules.
“They don’t want good appraisers,” he said. “They don’t want good numbers, even now.”
And again my question is, “Who is enforcing the HVCC?”