Mortgage Grapevine

HR 3044 (18 Month Moratorium on HVCC)

Hot off the presses:
For Immediate Release Contact: Jon Otto
June 26, 2009 (703) 342-5851
NAMB Applauds Introduction of HVCC Legislation

McLean, VA – June 25, 2009 – Last night, Representatives Childers (D-MS) and Miller (R-CA)
introduced legislation requesting an 18 month moratorium on the Home Valuation Code of
Conduct (HVCC). The National Association of Mortgage Brokers (NAMB) applauds the
introduction of H.R. 3044. NAMB would like to thank Representative Childers (D-TX) and
Representative Miller (R-CA) for their continued efforts and leadership on this issue.

“The introduction of this legislation is a victory for consumers and members of the industry
alike,” said NAMB President Marc Savitt, CRMS. “We thank Congress for recognizing the need
to address the issue of appraiser coercion without causing undue harm to borrowers or
diminishing competition in the marketplace.”

NAMB has taken an active stance against the HVCC since its introduction in March of 2008.
“We urge Congress to pass H.R. 3044 as soon as possible to ensure that more borrowers will not
be negatively impacted by this de facto rule,” stated Savitt. “In the period of time since its
implementation, the HVCC has increased costs to consumers and decreased the quality of
appraisals and has provided a level of uncertainty in an ailing housing market. Tens of thousands
of consumers have already been robbed of their opportunity to enjoy historically low rates by
Attorney General Andrew Cuomo’s rule.”

NAMB looks forward to working with Members of Congress as this legislation progresses.


This is good...
by dust10b June 26, 2009 4:43 PM

A-freakin-men!

I keep requesting "reconsideration" because the HVCC appraisers are not familiar with my local market. I supply closer, more similar comps and still they refuse to reconsider!

I have one waterfront property with a sold comp immediately next door at $1.5 mil, less land, smaller square footage, but was a "Cape Cod" rather than a rambler. He refused to use the house next door because it is a "different style". He then proceeded to use comps of split level homes with water view rather than water front, with less square footage and adjusted only $5,000 for an acre of waterfront proerty while adjusting $4000 for each fireplace! This guy is clearly not familiar with waterfront values in Annapolis, MD. Next door comp $1.5 mil, value of subject $569k. Tell me HVCC works!
by drahn June 26, 2009 4:54 PM

I hope we can all agree on this one. I'm going to call and e-mail my Congressman and both Senators! A-freakin-men is right!!

by Seabiscuit June 26, 2009 5:18 PM

Dang it, I was just getting used to the new system.

Why so many changes?

by Tux June 26, 2009 5:25 PM

I have just been telling everyone FNMA/Freddie is going bankrupt so they have to go FHA.
by BigHappy June 26, 2009 5:35 PM

I hope this results in a
better vote than their
bill to stifle it April 29

PEACE
by FROG June 26, 2009 5:47 PM

I hope so to frog...

One thing that's different this time is NAR's backing. That goes a long way.
by dust10b June 26, 2009 5:50 PM

The simplest way to solve this mess is to have the consumer shop for an appraiser on their own and pay for their own appraisal with no money paid directly to the broker or lender. The appraiser either is or is not a disinterested third party in the transaction. Have the borrower sign another disclosure stating they shopped and found the appraiser on their own and the appraiser is not related to them, blah, blah, blah. This government solving the problems one way and then changing them later is getting old. You would think that our elected officials would be smart enough to get it right the first time through. This is a small matter compared to how bad government could screw up healthcare. I hope this is a lesson to all of you that personal responsibility and good business practices eliminate the need for HVCC types of solutions to an industry that needs to return to higher professional standards before it can move forward.
by the voice of reason June 26, 2009 6:05 PM

Excellent work dust10b:

1.HVCC -We've Had Enough! Episode 1
http://mortgagegrapevine.com/thread/?thread=565927

2.It's Friday, The Weather is Great and HVCC Still Blows Nards
http://mortgagegrapevine.com/thread/?thread=565927

3.HVCC - To anyone who said it cannot be changed
http://mortgagegrapevine.com/thread/?thread=566600

Repeat
http://mortgagegrapevine.com/thread/?thread=567033

Thanks for the attitude and information

by YSP1971 June 26, 2009 11:53 PM

Providing comps to the appraiser and telling them how to do their jobs??? And this works how??? Did it ever cross your mind that it was this kind of behavior that caused the cape cod next door worth $550-600K to sell for $1.5MM??

This is the kind of crap that got us in the mess we are in now and you want to go back??? Think about it!!!
by Paul F June 27, 2009 2:16 AM

Why not put up a TAS type system? It works pretty damn well for VA...
by dust10b June 27, 2009 2:38 AM

You will definitely see a change here. It appears that the NAR is now actively soliciting its members for horror stories on the HVCC.

Since we all know how powerful their lobby is, expect the HVCC to be squelched due to pressue for the NAR.
by McC June 27, 2009 8:17 AM

Even if the HVCC is stopped, (temporarily or permanently), you do underatnd that brokers will generally never be able to order most conventional appraisals again, don't you?

The best we can hope for is that lenders will take back the ordering system themselves, using really good appraisers, instead of using AMCs that pay appraisers $175, and for that amount the appraisers produce nothing but a stingking pile of dung.
by Permutations June 27, 2009 11:52 AM

Permutations;

I'm not sure that's true. I've spoken with at least 2 major (and I mean major) lenders who have told me off the record that they integrated the appraisal ordering systems into their systems in such a way that it could be very easily removed. Why? Because they hate HVCC as much as we do! For the most part, lenders don't want the responsibility of ordering appraisals, managing rebuttals, etc...

Trust me, in the beginning some of the bigger boys with interest in AMC's will try to strong arm the issue, but as their fellows begin giving us our rights back, all the business will shift away and their hand will be forced.

I've got a good feeling about this, but that doesn't mean we can let the pressure off our congress people.
by dust10b June 27, 2009 12:39 PM

Dust I am with you on the TAS VA system.
by Blink75 June 29, 2009 10:32 AM

Paul F:


If you had any knowledge of this market area or the property involved, you would understand that the valuation was ridiculous. The house next door which sold for $1.5 mil would have been worth the same amount whether there was a house on it or not. It is the point at which the Chesapeake Bay meets the West River, a wide, expansive view with deep drafts. The property is protected by stone breaks and has 150 of beach front. Don't tell me this is a 550-600K property.

In the future, if you don't know you a-- from a hole in the ground, just keep it to yourself.
by drahn June 30, 2009 8:51 AM

BTW - I supplied the comps to LandSafe for "reconsideration" according to their own program rules.

All they did was send them to the appraiser to answer. His answer?

"The comparable supplied appears to be an anomaly and was not used as the sales price was too high."

In other words, "I wouldn't have paid that much for it so no one else should have."
by drahn June 30, 2009 8:54 AM

It's definitely frustrating....


by dust10b July 1, 2009 1:20 PM

God Bless the NAR. I used to make jokes about RE agents (they made it easy). For every good agent, there were 4 to laugh at. But they have the political clout appraisal organizations can only dream about. I'm sure the NAR isn't perfect, but they win my support if they can kill this HVCC joke.

Lending can be somewhat nationalized, but real estate is local and expert analysis is local. This is best done by a local appraiser who doesn't have to beg for work from cheap-ass AMCs. All AMCs care about is speed and cost. HVCC rewards AMCs. AMCs reward the inexperienced appraiser who is willing to work for low fees and then must cut corners to make a decent living (if you can call it that).

Now the tables have turned. Appraisals are a joke and RE agents are laughing at the appraiser. But what do you expect when you pay someone about $15 a hour?

Bottom line, appraisals are an opinion of value. But more than that, its a well documented report supporting that opinion. I can provide a report supporting a wide range of valuation. Is it a shock to learn that the less time & money given to an appraiser will result in a lower than expected opinion of value? What incentive does an appraiser have?

If someone wants my "high" yet well supported opinion of value, you need to pay me properly. And hold me accountable. But if you're going to hold appraisers accountable without paying decent fees, you're going to get VERY conservative values. You may as well use zillow or trulia. Because when the market does start to rebound (and it has in entry-level pockets), you need analysis on the edge of the market, not from 6 months ago.

And for those who are stupid enough to believe that appraisers were even partly responsible for the housing bubble, you need to revisit basic econ class. When pressure was removed from prudent lending guidelines, you ended up with too many "qualified" buyers and not enough supply. Change the lending guidelines, and shocker! HVCC is coming into effect at the end of the bubble and killing the local appraiser.

I've vented enough.
by Doug The Appraiser July 1, 2009 4:46 PM

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