NAR President Meeting on Appraisal Matters

Appraisal concerns were at the top of the agenda this week as NAR President Charles McMillan on Monday met with the New York State Deputy Attorney General and his staff to express industry concerns over the Home Valuation Code of Conduct. The HVCC agreement, which secondary mortgage market companies Fannie Mae and Freddie Mac have entered into with the New York Attorney General to curb faulty appraisals, has generated widespread concern. The agreement influences practices for assigning appraisals throughout the country because Fannie and Freddie apply it to all of the mortgages they handle. McMillan was also meeting on the issue with the head of the Federal Housing Finance Agency, which regulates the two secondary mortgage market companies. Separately, a post in the NAR Voices of Real estate blog on the state of the market generated more than 180 comments in just over a week, many from real estate professionals and others who shared their concerns over appraisals.

  1. David

    It should also be noted that over 65,000 people have both signed and left comments at 2 of the online petitions calling for a halt to HVCC. These 65,000 signatures have been accumulating over a period of 8 weeks.

  2. Bill Abalos

    I agree that the NY Atty Gen does not have authority over other states. He started this thing for his state and Fannie and Freddie are the one’s that created this accross the board attitude and into the nation wide mess that it is. I am all for fighting to reverse the HVCC because it shut down my business of 12 years, but let’s know who we need to actually go after. Let’s not be like Bush and attack the cousins of the one’s who are actually to blame. We all know how that’s going.

  3. Cindy

    Let’s stop blaming everyone and start standing up and taking responsibility for some of the mess. Real Estate agents are just as guilty as appraisers. Everyone had a hand in this mess or knew someone. Real Estate agents need to be educated to the fact not every thing goes up in value all the time. They need to start giving CMA’s that truly represent the current market not a market of 2-3 years ago plus their commission on top. They need to understand what a neighborhood is, comparable that has sold in the past 6 months not 2 years ago and the difference between sold price and asking price.

  4. Carolyn

    What Cindy and others may not realize or be dealing with in their neighborhood is that within very small areas, there are pockets of even smaller areas where prices fall and rise dramatically, even a mere block away. Since HVCC has been implemented, appraisers have been sent that are not familiar with my area, who have been using comps that are not even remotely in the same category; calling comparable and equal a pristine 3 bedroom home overlooking the skyline on a tree-lined cliff road and a run-down 3 bedroom that’s only one block away, but on a street mostly populated with nail salons, liquor stores and the like. Appraisers MUST know neighborhoods as well as real estate agents do, otherwise all our hard work goes out the window in regards to finding the right property for our clients and hours of proper pricing and negotiation. Any agent worth their title and license knows to use updated and current comps that reflect truly comparable properties. I only go back 2-3 months these days when pulling comps, and if there are no recents available, I use older solds and subtract whatever percentage the area has gone done, keeping it all current. Appraisers need to do the same, do their homework and do their job. Any variation of that would indicate a bad appraiser, just as it would a bad agent. HVCC should probably be reassessed now that there has been so much trial and failure of the system, continuing would be counter-intuitive to the positive effects of the stimulus package and boosting the faltering economy

  5. Tim

    Appraisers would love to do exactly what you suggest. In the past thats what we did in changing markets. Unfortunately we no longer have that flexibility in reporting. 90 Days…1 Mile. Period. Argue with automated review and Underwriting and you will receive no more assignments. Argue with the AMC and you will be removed from the approved appraiser rotation list. Period.
    We feel your pain and we have pain ourselves. This appraisal business is good for twenty something, tech savvy, still living with Mom and Dad till they get a decent job, young people. They have little overhead so $150 – $175 per report works for them. Its a little more than their friends make at the Gap or waiting tables. It appears that the system is ridding itself of older, experienced, independent appraisers so that one day the power brokers of big banking may say ” To much business and there are no appraisers left …BUT we do have this software we developed “…..
    Five minutes, hard cost = $1.50, charge to borrower = $150.00
    The markets problem is not with appraisers its because those who control the market don’t want appraisers. Gets in the middle of an additional source of profit. Can’t have that !
    Big banking makes the rules and changes them to suit their needs. This is what is happening right now. Not to worry though soon enough there will be no more residential appraisers. Just data analysts.