HR 3044 – 18 Month Moratorium on HVCC

There has been a bill introduced in the House of Representatives, H.R. 3044, that would put an 18-month moratorium on the newly enacted HVCC, the Home Valuation Code of Conduct.  HVCC outlined a new appraisal ordering process that started on May 1st where there would be no direct communication between a loan officer and an appraiser.  The loan officer would have to use an AMC, Appraisal Management Company, to order an appraisal.  HVCC was designed to address the housing market crisis and protect consumers by reducing the chance of the loan officer unduly influencing appraisers to inflate home values.

HVCC is not a solution to the problem it was designed to address.  Our current housing market woes and the credit crisis are not the result of loan officers and appraisers being able to talk to one another.  The impact of HVCC has been a hindrance to the housing market recovery and not a help. 

There has been a 25% or more increase in appraisal fees for consumers while at the same time a 30% reduction in revenue for local appraisers.  HVCC has resulted in transactions taking weeks longer than they should in some cases.  And finally because of the lower fees the AMC’s offer and the report turn around time expectations being so short, many appraisal jobs are being accepted only by inexperienced appraisers and/or appraisers who have to travel great distances to the property being appraised.  More appraisals are being done by appraisers not good enough to earn the business themselves.

HVCC has reduced motivation for appraisers to do a quality job by reducing accountability to those who order and pay for the appraisals.  Appraisers do not have to earn their work by doing a quality job like they did previously.  Inexperienced and/or sub-par appraisers get just as many jobs as quality appraisers simply because they are all in the same random pool.  I hope HR 3044 is the first step in eliminating and/or improving the system put in place by HVCC.

For the press release on NAMB’s website click here.

To track the bill’s progress on govtrack click here.

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