The Home Valuation Code of Conduct
As of May 1st 2009 the mortgage industry has experienced major changes in the way we conduct business. The HVCC reqiuirement for conventional loans reads as follows.
No employee, director, officer or agent of the lender or any other third party acting as joint venture partner , independent contractor, appraisal management company or partner on behalf of the lender shall influence or attempt to influence the development , reporting, result or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or any other manner.
Basically the lender or broker can no longer have direct contact with an appraiser but can only order an appraisal through a management company that will then contact the appraiser and place the order.
The purpose is to avoid any potential fraud. Here are the basic changes:
*CMA's and Comp Requests will not be allowed.
*Mortgage brokers will not be allowed to order appraisals.
*Mortgage brokers or loan officers cannot request specific appraisers.
*COD payment for appraisals will not be allowed.
*Value pressure on appraisers will not be allowed.
*Owner's values or hoped for values cannot be communicated
*Blacklisting" cannot be done without notice to the appraiser
*"Value Shopping" by the lender is not allowed.
*Withholding timely payment is prohibited.
*Borrowers must be supplied a copy of any appraisal.
*Required 10% re-appraisal or review of reports.
*Lenders will be held accountable for appraisal quality.
*LENDERS will be REQUIRED to report appraisers to State Boards of Real Estate Appraisers if appraiser misconduct is suspected.
And, finally, the lender MUST provide a copy of the appraisal to the borrower not less than 3 (three) BUSINESS days prior to closing.
Should you need a copy of the HVCC requirements please email me at frank@equityoptionscorp.com