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NY Times Continues HVCC Assault

Last week, the New York Times published an article “In Appraisal Shift, Lenders Gain Power and Critics” (you can read excerpts at Appraisal Scoop). Yesterday, the Times ran with what could be read as a logical extension of the previous article.

In “Appraisals As Deal Scuttlers“, the Times highlights a significant unintended consequence of HVCC – the use of appraisers who lack geographic competency. The article starts with a home that sold for $555,000 but the appraisal came in $490,000. “Peter Caruso, owner of Caruso & Boughton Realty in Franklin Square, said that it was lenders who were driving the trend toward lower appraisals, and that they were ‘almost trying to decrease the prices below what the market is bearing,’ by using appraisal management companies that don’t hire local appraisers. ‘How do you sell something in Nassau County when it goes to a management company in Pennsylvania and they assign it to someone in Montauk?‘”

Comments
  1. Tina Newport

    As an agent who lists properties and also works with buyers , there are 2 markets.
    REO and short sales and fair market.if making an offer on an REO consider the comps if primarily REO driven. If fair market, don’t lowball the offer if there are not short sales or REO’s in that specific market. Appraisals should also reflect this. This will put value back into the market and help sellers achieve their goals in a fair market environment and also keep appraisals from blowing up and deals can be closed. This will create some balance in the market and give a buyers beware that they should search in their affordablity if not willing to take the time and risk associated with REOs and short sales.

  2. Alex in San Diego

    Appraisal is supposed to be a “professional evaluation” of the property and the transaction. HVCC added a component of fear and liability into the equation. Its whole goal is to CYA by reducing the appraisals by 5-10% just so the banks and mortgage insurers could have an additional layer of protection. HVCC is anti-market, despite all efforts of this Government to revive the housing market, its comeback will be severaly limited as long as HVCC is around. Why waste Billions of dollars in tax credits and other stimulus programs, if you could just eliminate HVCC and let the market become “market driven”. What a concept?

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