NAR Responds to FHFA Guidance on HVCC

NAR President Charles McMillan sent a letter to Federal Housing Finance Agency (FHFA) Director James Lockhart addressing the agency’s recent guidance on the Home Valuation Code of Conduct (HVCC). In the letter, Mr. McMillan applauds FHFA for its efforts to address misinformation surround the Code but disagrees that the HVCC is appropriately dealing with the controversy surrounding the appraisal process.

NAR cites survey data that seems to indicate that the Code is creating negative unintended consequences. “According to a survey of our members, 76 percent of respondents said the length of time to obtain a completed appraisal report increased after May 1, 2009. More than one third of REALTORS® have lost at least one sale because of a delay in the appraisal process. At the same time, respondents who identified themselves as appraisers said their time frame to submit an appraisal report has decreased and half of these respondents say this impacts the quality of the appraisal report.” At the same time, the cost to the consumer is increasing.

The letter also references Professor Emeritus at the Wharton School, Jack Guttentag whose recent commentary in the Washington Post stated that the HVCC is causing more problems in the real estate industry. Mr. Guttentag said the “HVCC ‘cure’ for the appraisal problem of overvaluation has been implemented in a market in which the problem has become undervaluation, and the code is making that problem much worse.

  1. Corey

    Head of Agency Controlling Fannie and Freddie to Step Down

  2. Bill Abalos

    Here’s the deal, appraiser’s across the nation were totaly against the HVCC and spoke out against it. NO ONE CARED. Mtg Brokers did’nt care, lenders did’nt care, realtors did’nt care. It was easy to blame the appraiser. Now that the resulting mess is affecting everyone’s pocket- NOW – they all care. Stop being hypocrites people. I want my business back. I want to feed my children again on a regular basis. You have no idea what it is like to tell your kids that they can’t have that second glass of milk because we’ll need it for the next day. Shame on you all. Let me get back to doing what I do best. My name is Bill Abalos from El Monte Ca and I was a professional appraiser – when it meant something.

  3. President Charles,
    Please keep hammering away at them.
    Hundreds of appraisers across the country were stiffed today by an Appraisal Management Company owned by Taylor, Bean, & Whitaker.
    Appraisers doing business with the AMCs, only because the HVCC essentially requires the arrangement, are forced to extend credit to companies they owned or controlled by shaky and sometimes, shady, lenders.
    Appraiser Active: Taylor, Bean, & Whitaker – What About the Appraisers?
    This must be resolved.

  4. David

    Abbreviated Version Of FHFA’s Guidance To Appease the NAR
    Guidance Rule #1
    Oh yeah…you should use appraisers who know the area
    Guidance Rule #2
    Oh yeah Realtors are still allowed to coerce (speak with) appraisers.
    Memo from James Lockhart To NAR: “OK…I made a few changes…can you please call off the NAR now?”.

  5. Corey…believe me, we cared! Sacramento Realtors, Appraisers and Affiliates did everything we could to express our belief that HVCC was not going to be the saving grace for buyers that it was porported to be…and no one listened! I have had 3 properties not appraise, despite one having 5 offers in 36 hours, 4 over asking. The appraisal came in $54,000 low. Tell me again, who is setting value? Certainly not ready, willing and able buyers and sellers!

  6. David

    The question is: When did Realtors begin to care? I (and many other appraisers) saw the writing on the wall in March of 2008 when the plans for HVCC was first announced. It didn’t take a rocket scientist to realize that forcing appraisers to surrender all of their clients and 1/2 of their future income was a death sentence. A few of us have been seeking ways to fight it in the courts, in the media, and in the political arena for 17 months. During that time I never ran across a single Realtor who expressed concern about it. In fact, I wrote to the NAR many times trying to solicit their support in fighting it. I still have an email from their media specialist stating that HVCC was not an issure that the NAR had an interest in. This email was sent to me 2 months ago. Suddenly however; they have become concerned now that they see that
    Realtor commissions are being dinked.
    If you want to learn more about my feelings towards HVCC visit our webpage at