NAR Calls for Delay of HVCC

On April 20, 2009, NAR sent a letter to Fannie Mae and Freddie Mac requesting that the Home Valuation Code of Conduct (HVCC) be delayed until May 1, 2010. Citing a host of reasons, NAR President Charles McMillan said “Stakeholders across the country will be granted sufficient time to prepare for changes to the appraisal process brought forth by the HVCC.” A copy of the letter was sent to the Federal Housing Finance Agency and NYS Attorney General Andrew Cuomo.

Some of NAR’s concerns include a lack of guidance from the government sponsored entities (GSE) since the final agreement was announced in late December 2008. NAR also noted that it is not clear who will have enforcement responsibility for HVCC and the Independent Valuation Protection Institute (IVPI) is not yet operational. Delaying the implementation of HVCC for one year will give stakeholders an opportunity to address these and other concerns outlined in the letter.

Read the letter to Freddie and Fannie.

  1. Bill

    Let’s cross our fingers and our legs.

  2. Debra

    I hope they can get this changed… it is harmful to us all and the buyer and sellers will suffer… one of our top lenders is using street links and they are horrible… they are sending appraisers from Fairbanks to Homer Alaska over 900 miles apart and there is nothing good to come of this… they also are giving the bad appraisers work so this makes them money at the cost of the buyer and seller…

  3. In Denver metro,4/09,as an owner under contract for a 2 storey home at 220K; FHA appraisal came in at 195. Appraiser used ANY nearby recent sales regardless of construction type, used 3 and 4 levels and only one 2 storey, or whether HUD, REO. I am apparently stuck with this for 6 months. Anyone have any idea what recourse I may have to get the thing redone ? I asked an appraiser friend to see if he could do a conventional appraisal, he came out to the house, but called me in a day or so to say that he could do no better than that. Told me that underwriting would throw it out. Looks like I might just have to suck it up. Any comments ?

  4. Sally Perez

    It is really not going to do anything except create a new income stream for the lenders! I had an appraisal ordered by the lender and the appraiser was from out of town. It turned out that he sent a non-licesned person to do it and claimed that he had “inspected” the property. He was horrible, the appraisal was horrible and I ended up filing a complaint on him with the state. It also cost the buyer $450!

  5. Cathy Manuel

    I think the idea is crazy. Appraisers will have to rush through their jobs with this new ruling, they may not know the areas well, and it will cost the buyers more.

  6. Mike Harrison

    I have had similar experiences. 4 weeks to correct an error the AMC made. This will cost the consumer a bundle with lock extension fees, extra fees to the AMC and not to mention bad appraisals.

  7. David

    “Looks like we’ll just have to suck it up” was correct. Our shop went from seeing a $12,000 per month income to $300 this month. We refuse to accept AMC orders so we’re out of business.

  8. Rita Poklacki

    I hope everyone is calling and emailing their Congressmen. I call every day. Please visit They are a good resource to see what is happening. There is an amendment to a bill that will be before the House next week. Read up and talk to your Congressmen – Ok – I mean leave a message with their staff member since they won’t actually talk to you. Let them know your opinion and use NAR in your conversations. Without trying to call your reprsentatives this will surely be in place. I feel fro David. My husband owns an appraisal company. If HVCC were not going into effect this would be one of his best years. Who knows what will happen. I am optimistic that someone will say – wow this thing is ridiculous! Get rid of it.

  9. I am an appraiser in New Jersey and have been so for 20+ years. I”ve been having to adhere to these new rules already. Lenders are dictating totally unrealistic appraisal criteria and it’s probably going to get worse come 5/1. Let’s hope we get some type of reprieve.

  10. David

    Looks like the NAR really can’t work miracles. I appreciate the fact that they jumped in to help appraisers 1 week before the deadline but I’m still stumped on why they did it. Was it to appease the appraiser/realtor members or did they finally realize that their deals will now be at the mercy of the skippy the appraiser.

  11. Eugene A. Leone

    The Banking Regulators have spoken. The result is a serious interuption in our business. I have been established for over 12 years. The regulators in affect gave my Appraisal business to some AMC and out of the area appraisers are now doing work for my long established clients. Now its our turn to speak up. It’s time for Appraisers to get organized- we need a united front to protect our rights. It’s time for Appraisers to form a Union.

  12. I’ve been in business over 13 yrs and have employed many. With the recession, I had to downsize my office & work from home. I was starting to thrive again, and built back up to 50+ appraisals a month, with a small staff. The first week of HVCC, I received in only 1 order. Many of my broker clients sell to Provident Funding. Unfortunately, Provident cut back there “approved appraiser” list from 14,000 down to 4,000 nationwide. I’ve written the media, congressman and the head of the AZ board of appraisers. I contacted an attorney (spent over $4,000 legal fees) to find that it would cost me over $100,000 to initiate a law suit against the swine that forced the HVCC upon us. Unfortunately, I can not fight the battle alone. I am more angry that the appraisers let this happen to themselves. The fact is, some appraisers are happier now. Those are the lap dogs that will settle for scraps in life. If there is anyone out there that would join me, I would gladly stand up and fight. Consumers are just barely seeing that there “fees” are going up–but no one really cares. Who’s with me? The way we fight this is by banding together to form an association (most frown on the word “union”) and stand up and be heard. Why are we paying our annual dues to be appraisers if no one stands up for us? Why do we rely on the brokers and eraltors to fight our fight??? Many are content to sit on the sidelines and say “let them fall on their faces once the public eralizes how crummy HVCC is….” But c’mon guys, do you think the AMCs, funded with OUR FEES are going to give up quickly? No way. They will use our fees, hire the lobbyists–and we can bet our boots we’ll be order takers for the rest of our careers. I find it insulting that some AMCs expect me to “log on to their website and clic on the posted order for first come first serve.” I’m sorry, but can you ever see your attorney being treated like that? Should we hold ourselves any less higher??
    I can be reached through my website

  13. Hello everyone, just wanted you to know that the HVCC (Home Valuation Code of Conduct) is a reality and you need to take control now in your SALES CONTRACTS.
    If you have never heard of HVCC…You are in for a rude awakening!
    In a nutshell, this new HVCC law starts now in May, so Mortgage Brokers, Realtors, Buyers and Sellers will have NO control over the appraisal process. Brokers can no longer order appraisals directly from appraisers. Realtors, Buyers and Sellers can no longer order an appraisal and then bring it to their lender or bank for a loan!
    Banks are the only ones who can order the report directly from the appraiser or a third party will do the ordering hired by the Banks. These third parties are what we call Appraisal Management Companies (AMC’s). The banks are hiring these companies to puts a layer in between the banks and the appraiser for more independence and less lender pressure on the appraisers to “make the value”.
    **Any of the above individuals CAN order an appraisal directly from the appraiser if their reason for the report is not for a LOAN, IE; to determine a listing or sales price, to obtain current value, a divorce, estate, tax rebuttal appraisal, PMI removal, etc. That is NOT prohibited and is actually encouraged in this ever changing market ***
    But here is where REALTORS, buyer and sellers DO have control. Just the other day I was talking to an appraiser at Lake Lanier property in GA, she told me a condition that they add in the sales contract under the special stips page was the following statement ( change the language to suit your area then pass it on to other realtors):
    “Buyer shall have all the rights and provisions manifested by the Appraisal Contingency provided that the appraiser the buyers lender selects has COMPETENCY to perform an accurate Lake Royale Property appraisal and has completed at least 10 appraisals on Lake Royale waterfront properties within the past 3 years. Said qualifications of any and all appraisers hired shall be provided to the Listing Agents in writing upon request.”
    This is an awesome idea! I would suggest SELLERS rights are also protected in the contract, by stating that if the buyer signs an appraisal contingency in the contract, they should also REQUIRE an experienced appraiser in the property be it Lake, Golf Course, even a particular neighborhood. I would also suggest that in the case of a special property like Lakefront that the experience be even greater at least 10% of their work is completion of this type of appraisal over the past 1 year, not 3 years as things have changed over the last year as you well know. Many lenders are requiring that the property appraised by the appraiser is no more than 30 miles from the appraiser’s office. I would suggest that you narrow that down and state that the appraiser must live in the SAME COUNTY as the property being appraised.
    I can’t tell you how many times a lender sends someone from Raleigh to Lake Royale to appraise a property, and unless they have considerable experience on this lake, which most do not as their primary work is somewhere else, then you have a disaster waiting to happen when it comes to the appraisal!
    So you DO have control and you need to start adding this type of language to every sales contract and making sure the banks comply because it is in the binding sales contract. Trust me when I tell you that Banks and especially the Appraisal Management Companies do not care about competency of the appraiser. They select the one that can do it the quickest and the cheapest and if that happens your DEALS will fall apart on a regular basis.
    Please pass this along to every Realtor you know, repost it, blog about it NOW. If you do then you can take control back on this HVCC law when it comes to appraisals on your sales deals.
    If you have any questions about this new law, let me know, it is time to take control of your profession back and make sure competent appraisers are used!.

  14. 16 years in business, 11 on FHA roster. Both are gone this year. I’m pretty much done. Looking to start some other business. I will not work for AMC’s, HVCC killed my Conventional and HUD is killing my FHA’s because for some reason a Licensed Appraiser isn’t good enough any more. Even with 11 years experience with FHA. Theres no work for Licensed appraisers any more. I feel like I was thrown over board. I hope I can find something floating.

  15. David

    Amanda you have a great idea (in theory) in telling Realtors how they can have some type of control over the appraisal process. The reality however is that it will never fly. The new process was set up to prevent control of appraisers by anyone other than banks (who own the largest AMCs). It was also set up so they can send the work to the cheapest appraiser; thus increasing the AMCs(banks) profit potential. They’re already found an ingenius way to steal 1/2 of the appraiser’s income while simultaneously putting their competition (mtg brokers) out of business. Don’t get your hopes about Realtors finding a secret back door as a way of maintaining control over the appraisal process.

  16. Thomas Bealle

    The problems with the HVCC and AMC’s are:
    1) The AMC companies, which will be the only ones allowed to order appraisals, are subsidiaries of the nations largest title insurance companies and banks. This is in direct violation of anti-trust laws and FIRREA 12 CFR 34 banking laws. They will have a direct monopoly, not to mention a conflict of interest, as they will be able to dictate their unreasonable demands on appraisers.
    2) Appraisers are being asked to perform the same quality of work for1/2 or 1/3 their normal fees, which will result in poor quality of appraisals which is the problem the HVCC was established to solve.
    3) The cost to consumers has increased in higher appraisal fees to the AMC companies, who then pay less to the appraisers doing the work. This is a violation of RESPA laws.
    4) The HVCC creates huge communication problems, i.e. appraiser finds problem, reports to AMC, AMC reports to client, client responds back to AMC, AMC reports back to appraiser, appraiser corrects problem and reports back to AMC, AMC reports back to client, etc.,etc., etc. (this can take WEEKS before an adequate appraisal can be completed).
    5) AMC’s are not regulated. When they violate provisions of HVCC, who do we report to? Nobody, because there is no regulation in place.
    6) The success of this country has been based on the foundation of small businesses. This legislation is a direct hit to the small business person affiliated with the real estate market.
    There are many other problems with the HVCC which are too numerous to go over in this letter