The Home Valuation Code of Conduct (HVCC) is now in full force. The May 1, 2009 deadline has passed and the early results are in.
Remember, this system is a result of the settlement between Fannie Mae and Freddie Mac and Andrew Cuomo the Attorney General of New York. As of now, we are not able to “check value” with the appraisers in advance to gain any assurance about value or the viability of a transaction.
Lenders are requiring that all appraisals be ordered through independent third party companies with no contact between the appraiser and mortgage originator. The third party companies are owned by the banks! So in the name of “protecting the consumer” and independent analysis the company lending the money is now in charge of the value. Nice.
But it gets better. We had negotiated fees for our customers in advance for appraisals. In exchange for the delivery of regular volume, the average appraisal used to cost $300. Our first client just got his call from the appraiser we don’t know and the fee is $525.
So in the name of consumer protection, this customer has no idea that the home will or won’t appraise and has to risk $525 to find out. Even if the value is OK he has to spend over $200 more.
Government at work…Sweet don’t you feel protected?
