by Dell Claiborne
Recently my Realtor mentioned new HVCC laws affecting appraisals. I’m not really sure I understand what they are or how they affect me. Will you please clarify them?
HVCC stands for Home Valuation Code of Conduct and it’s a hot topic in the real estate industry right now. Appraisers, ed Real Estate agents, and mortgage lenders all have opinions. Let me give you a little background: The HVCC isn’t a law at all, but a set of regulations that came about as a result of a law suit filed in 2007 by New York Attorney General Andrew Cuomo. Cuomo’s suit accused an Appraisal Management Company (AMC) by the name of eAppraiseIT of working with Washington Mutual Bank to influence appraisers to set the values of their properties. These appraisers had turned in appraisals that showed home values at whatever price the bank needed to make their deals work, regardless of actual home value. This was seen as a lot like the illegal practice of price fixing.
Part of the case settlement was the creation of HVCC, which is intended as a “barrier” between loan production staff (loan officers and originators) and the appraiser to limit inappropriate pressure from lenders, brokers or borrowers on the appraisal process.