NAR Survey Results Highlight Impact of HVCC

Yesterday, a preliminary analysis of a NAR survey was released, which indicates that the implementation of the Home Valuation Code of Conduct (HVCC) appears to be having adverse impacts on the housing markets.

The use of out of area appraisers was reported by approximately 70 percent of REALTORS. Respondents also indicate that appraisers are facing time constraints by AMCs. You can get more information on the NAR Research page on the impact of HVCC.

Appraisal issues associated with the implementation of HVCC have recently been in the news. The survey was statistically representative of the NAR membership.

  1. David

    On May 1st HVCC has cut the appraisers salary by 1/2, although their expenses remained the same. In order to stay in business they were forced to put in 50% of their typical effort. In a nutshell; they are now form fillers who apply little to no analysis to the properties they inspect. That should do wonders for the housing recovery.

  2. Jackie Hamilton

    So what is the bottom line. What can we do as Realtors to have this issue addressed. It is becoming an increasingly bigger problem each day. Where we’ve requested a second review, the lender is not requesting a 2nd appraisal, resulting in either losing the sale or renegoitiating the contract again….We need help!

  3. Tim

    My local Realtors tell me that they advise the borrowers to use independent lenders who don’t use AMC’s and title companies that are independent. Most Realtors in my area have taken their escrow accounts (and personal accounts) out of the big banks and moved to smaller community banks. I was very surprised when an appraiser buddy of mine from a couple hundred miles away told me that was happening in his market to. Maybe NAR should adopt a “civil boycott”. Bankers love money, deny them access to steal it and that makes them sad !

  4. Reed

    There is one benefit I received from HVCC. It stopped the annoying “comp check” calls.

  5. HVCC simply stated is a massive failure at every level. HVCC is like curing a head cold by replacing it with cancer.
    What we need are real solutions and higher standards for appraisers combined with stricter compliance laws, but what we got is “fast Food Style McAppraisals.”
    I can’t believe Congress has authorized 1.5 Trillion to bail out a broken and fragile economy only to subject the housing recovery to HVCC. Talk about boring a hole in your boat in the middle of the ocean!
    Since the new rule was implemented on May 1st 2009 what I have noticed are appraisers that have scant to no knowledge of the area they are conducting an appraisal in (which also happens to be illegal) ; appraisers who are just indifferent perhaps due to the massive pay cut HVCC has caused them. I have also seen appraisal reports with COMPS that have no relation to the subject home being appraised and generally LOW appraisals based upon little to no research.
    HVCC in the DFW Housing market (the 5th best housing market in the nation) has been responsible for busting out numerous legitimate homes sales or has caused additional losses to home sellers who were told their homes were worth even less than the bargain basement price they were selling at.
    Then there are the expenses and hardships experienced by buyer and seller alike caused by long appraisal delays that result from appraisers who don’t show up or got the wrong address or wrong instructions. Hardships caused by appraisers have left buyers with no place to live, moving companies with no one to move and additional expenses to homeowners who had to bust their moving date. Then there are the utilities that get switched off when the family never moved out. You just have to live through it to understand the heahaches HVCC has caused.
    Then the cost of the pathetic HVCC appraisals themselves can be as high as 100% more than what it would have cost on April 30th due to all the mistakes, revisits, redo’s and the like. Keep in mind that about 50% of the cost of an appraisal is being absorbed by a distant middle man who is really little more than a “Pizza Delivery Dispatcher.”
    My recent client who just closed today paid nearly $800, nearly double the normal cost of an appraisal as a direct consequence of HVCC mistakes and blunders.
    HVCC needs to be suspended and scrapped. What we need are stronger laws and additional education for appraisers and we need to act fast as we can’t afford another 1.5 Trillion to bail out stupid is as stupid does.

  6. Please contact your representatives in congress and urge them to co sponsor HR 3044. An 18 month moratorium of the HVCC. The HVCC needs to be rewritten to fix its inherent flaws that are affecting consumers and the economy.

  7. LA-Certified

    Hey wait there’s more…. I’ve lost most all of my business and clients thanks to the HVCC over the past year… After 20 years of managing my own company, I now have very few prospects from mortgage lending and may have to shut down completely. Working for AMCs is not an option for me and many other competent/seasoned appraisers with years of experience and knowledge. With fees now ranging from $180-$225 (and falling) and assignments being dolled out with an expected turn around time of 48-72 hrs we are sunk. I am sitting in one of the largest metro areas in the country and currently have only 1 assignment on my desk because my fees are to high, yet they are 25% less than you are paying the AMCs…..
    Economics 101: In order to run a profitable appraisal business there must first be an accounting of all the necessary tools required. Basic overhead that includes everything from an office and supplies as well as phones. Then there’s the cost of data, software maintenance contracts, health insurance, memberships, licensing and continued education, E&O insurance and auto-expense. The cost of all of the above mentioned requirements have increased annually over the past 20 years. Now to put things in perspective I was making $250.00 minimum per appraisal in 1989…

  8. Scott Wilcoxson

    Please call your reps. & congressman to support HVCC moratoruim. Call them and email them once a weeek.
    Been appraising for 11 years and have worked my but off to aquire the clients that I “HAD”. Now they are all gone except 2. I can only give you one quess as to why I even have the time to sit here type this out. I love what I do had hoped to be an appraiser up until I retired. But not plaaning on it now. I figure I have about 1 year left if things don’t change and then it time to hope that some one is looking for a 41 year old employee. This is the biggest mess I have ever seen.