Charles McMillan 2009 President, NAR
By: Dennis Norman
National Association of REALTORS(R) 2009 President, Charles McMillansent an email to members stating “as a direct result of my recent meetings with the New York Attorney General’s office, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac this week issued new guidance to all lenders on the Home Valuation Code of Conduct”(HVCC).
The Federal Housing Finance Agency’s notice to lenders states:
- “Unfortunately, during the 2005 to 2007 period, mortgage lending was much too aggressive and placed pressure on the appraisal process. In some cases, that resulted in unrealistically high appraisals, hurting homebuyers as well as investors. The HVCC is designed to promote professional appraisals free from inappropriate pressure from lenders, borrowers or brokers.”
- Contrary to some suggestions, the Code provides for communications with appraisers about errors, additional needed information and unprofessional conduct.
- Contrary to some suggestions, the Code does not lead to lower appraisals for property. The Code insulates appraisers from pressures that led to higher or lower appraisals and should now lead to more accurate valuations.
- Contrary to some suggestion, the Code does not favor the use of AMC’s (Appraisal management companies) over independent or in-house appraisers.
- The Uniform Standards of Professional Appraisal Practice (USPAP) requires that an appraiser be competent and knowledgeable of the local market to perform an appraisal.
- Closing costs have risen in some instances, but that has not been a function of the Code.
- The Code may have initially slowed appraisal time as it was being implemented. However, there are other reasons for turnaround time changes;..
- Appraisal are transferable between lenders under the Code. Whether a lender decides to transfer or accept an appraisal, however, is up to the lender, and is not related to the Code.
Now that makes you feel better, doesn’t it? Hmm…I don’t want to be a skeptic but the FHFA notice doesn’t sound like much more than trying to convince us that what is happening is not happening. I would encourage everyone to read the notice and decide for themselves…to read the report click here.
In his email, Charles McMillan notes that Fannie Mae and Freddie Mac have both recently posted extensive Q&A’s on HVCC on their websites…the links are below:
Fannie Mae Q&A’s
Freddie Mac Q&A’s
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