Last Friday I mentioned that I was going to post some information on the new HVCC or Home Value Code of Conduct - so here it goes.
The HVCC is designed to ensure that the appraisals that are done for purchases and refinances are done in a matter that they're in no way influenced by any party involved. The broker will usually order the appraisal through the lender, the lender has a list of approved appraisers which it blindly chooses from, the appraiser makes the appointment with the borrower, and when complete, the broker and borrower are the last to see the estimated value of the home. Below are some more caveats:
- The appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company.
- A copy of the appraisal must be provided to the home buyer/borrower no less than three days before closing.
- The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter time frames, conservative expectations are warranted.)
- Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted.
Personally I think this is a good thing for consumers - it provides a fair appraisal of the property. Managing your long term financial goals requires accurate figures - how can you expect people to properly weigh the benefit of their equity if the appraised value is incorrect. More regulation was bound to emerge from this housing meltdown - we're only at the beginning of the reform. Tomorrow I'll make a few notes on the new TIL rules or the HERA - Housing and Economic Recovery Act. Please contact me if you're having trouble working around the HVCC with other lenders - I'll let you know how we use a combo of disclosures to keep people cool.
Rates were slightly down today - and moving in the right direction. Par is still around 5.25%.
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