NAR_grey_logo-01

Freddie Notes Improvements since HVCC Implementation

The National Mortgage News is reporting that Freddie Mac is noting a “tangible improvement in the quality of appraisals of loans it buys” since having implemented the Home Valuation Code of Conduct (HVCC). The appraisals are compared against an AVM that Freddie uses as a check. Patricia Clung said that 15 percent more appraisals come acceptably close to the AVM value.

The article goes on to quote Ezzard Alves of Fannie Mae: “Appraisals are low simply because values are declining, which was happening before the code took effect, Alves said. As for the claim that management companies are using “out-of-area” appraisers, he said, Fannie and Freddie require the use of appraisers who know the local market.”

Marko Berishai of DartAppraisal.com cited three factors for the increasing cost of appraisals. Supply and demand is one reason. The cost for appraisers to comply with new requirements is being passed on to consumers. and Third, the 1004MC has added to the cost of the appraisal.

Comments
  1. It’s already time to call BS on this claim by Freddie.
    NAR has quite a bit of information that tends to point in the other direction. I have a mounting pile of appraisals from Florida that tend to prove otherwise, along with AVMs that are sent along with the assignment request from the AMC.
    Is it any wonder the appraisal comes in close?
    Check this LINK for an Atlanta story that illustrates something different than Freddie’s claim.

  2. All my appraisal clients have something much different to express … many are poor quality and less time is spent doing the apparaisal to meet the financing goals of the banks!

  3. All my appraisal clients have something much different to express … many are poor quality and less time is spent doing the apparaisal to meet the financing goals of the banks!

  4. Absolutely false. Every deal I have had since May 1, 2009, and in particular after June (once it all started to gel) has had an appraisal issue. Most recently, a commercial appraiser was assigned to a great house. She was the one who told me, the listing agent, that Fannie/Freddie have determined that San Diego is a “declining” market (no back-up for this statement provided). And that “declining” designation is then applied as a blanket over the whole city.
    And that designation allows the appraiser, or implores her, to find the lowest comps possible, which she did. And she promptly dive-bombed my appraisal by exactly $40,000 off contract price. She went well out of her way, well beyond 1 mile, to choose terrible bank-owned junky comps that had nothing to do with my glorious traditional sale.
    Another deal cancelled thanks to Fannie/Freddie guidelines.
    I am not sure who they think they’re helping with blanket designations that don’t make a wit of sense, or by purposely holding the market down. Which is exactly what is happening.
    I am opposed to HVAC and randomly choosing appraisers out of a hat.
    The program is a disaster. Anything other than what real “front line” brokers like myself tell you, those who sell a lot of properties, probably is some convoluted way to protect Fannie/Freddie. How can a city be declining when houses under $400K get 20 or 30 offers from legitimate buyers? I could go on and on.
    AMCs can go the way of the Walkman. No longer useful or practical.

  5. David

    Yeah right! Freddie Mac shares will soar from $1.30 to $60 per share in the next 10 years too!
    Ask the top 7 bank execs how much talent you get (or keep) after cutting someone’s pay by 50%.
    Freddie Mac is either high on herbs or still living in denial.

  6. PJTMC

    “Fannie and Freddie require the use of appraisers who know the local market”?!?!?!…now that’s a laugh. Nice to sit in an ivory tower and spew out political correctness. It is apparent these guys don’t have a clue as to what is really happening out here and this just proves it.

ADD YOUR COMMENT