HVCC-Home Valuation Code of Conduct

As of May 1st, 2009 all appraisals ordered for conventional financing will be required to go through an appraisal management company (AMC).  This is part of new legislation that seeks to protect lenders and borrowers from possible inflated values.  However positive the intention, there will be some ill affects that we, the real estate community, will most certainly need to endure.  Let’s take a look at some of the more crucial unintended consequences.

Cost:  The average cost for a full appraisal right now is $400-$450.  This is expected to be as much as $550.  Additionally, appraisers can expect to receive a significant decrease in revenue per report. This will likely result in a greater volume of work needing to be done to maintain current revenue levels possibly resulting in lower quality and therefore quality could diminish.

Versatility:  This could have broad range negative effects on many.  As different lenders have aligned themselves with different AMC’s, the ability to move loans for our clients benefit to new lenders will certainly slow down or stop all together.  Switching to a different lender could cost the borrower another appraisal fee with a different AMC.

Communication:  The only communication with the appraiser can come from the AMC itself.  Again, that AMC is determined by the lender.  Even something as simple as a box not being checked in the appraisal could potentially be a time consuming ordeal to get fixed as we can’t email or call the appraiser directly.

Time:  If an appraisal is not getting done in a timely manner, the only recourse or inquiries they can receive will be through the AMC.  The ability to ask for a rush is definitely possible; however we can also expect an additional $50-$100 fee for that.

My intention in writing this is not to bring any more negative attention to our industry.  As this process is obviously new and untested, we all need to be aware of the details and work together to make the financing experience as positive as possible.  The Home Valuation Code of conduct is meant to protect consumers and lenders alike, so try hard to be patient and allow the process to work.  It will be rocky, and sometimes painful, but there are currently no other solutions.  We must endure and together make the best of it.

Building relationships with our clients to provide successful home ownerships.