Let’s let HVCC RIP

Home Valuation Code of Conduct – HVCC

Well, if you’re reading this, you’ve probably heard of it in the past few months. If you haven’t, you must’ve been living under a rock 🙂 .

The media has had another field day, including a feeding frenzy of appraisers. Somehow, they’ve managed to still make “IT” all the appraisers’ fault – the delay in recovery of the economy, which supposedly would pick up if only the appraisers weren’t impeding the appreciation of Real Estate values – upon which the whole dang economy rests. Ya, right.

So, I was right!

In an earlier post I derided the HVCC (and it’s “cohorts”), mocking that, yes, that will make it all better. And – here we are. QED.

Low appraised values = faulty appraisals!

I’ve pulled two quotes, below, from this site, RISMedia.com, – see them in context:

Confronting New Appraisal Rules, Impact on Housing/From RISMedia

Bill Garber, director of government and external relations for the national Appraisal Institute, said appraisals are meant to be a risk-management tool for lenders “who typically don’t want to lend beyond what the value of the collateral is worth.”

“Appraisers don’t make the market. They simply report what is occurring within the markets, and they are sort of the eyes and ears of the lender,” said Garber, whose organization is the nation’s largest association of appraisers. “In the end, it’s really a lending decision.”

Read those two quotes again and let them sink in. Bill Garber is with the AI, my “nemesis”, but those words are “appraisal truths”. They are the job description for an appraisal assignment for mortgage lending purposes – the kind of appraisal most people are familiar with and complain about. Particularly important is the last sentence in the second quote: “In the end, it’s really a lending decision.” The lender could offer different terms, if they wanted to, but they may end up with a non-conforming loan they wouldn’t be able to easily pass along to third-party investors (FNMA, Investment Co’s, Private Party Investors, etc.). They don’t want the added risk of carrying that loan. as it might affect their stock – which, by-the-way (?) may be part of your 401k investment portfolio. The profits don’t all go into those smelly rich CEOs’ pockets, see. You DO want your 401k to perform well, don’t you?

You’ve got to connect the dots in life!

I pulled another quote, below, this one from LendingCentral.com, to shed a little more light on the trickle-down effect of regulations. Read this in it’s full context, then tell me whose fault it all really is.

US Report: Suspended home lender big blow to US mortgage brokers

Pair went on to say that new appraisals would need to be ordered for borrowers who transfer to another wholesaler as a result of requirements under the Home Valuation Code of Conduct.

“The lack of portability caused by the HVCC, coupled with already slow turnaround times, will undoubtedly prolong the process to obtain a home or refinance,” he added.

The Washington, D.C.-based trade group is calling for the immediate repeal of the HVCC so the loans can be transferred without additional appraisal costs to the borrowers.

NAMB also called on the Federal Reserve to clarify how waiting periods and new disclosure requirements under the Mortgage Disclosure and Improvement Act will impact unfunded Taylor Bean loans.

“The issue of Taylor, Bean and Whitaker has shed more light on problems in the marketplace,” Pair stated. “Together, the HVCC and the MDIA disclosure requirements are causing unintended consequences and slowing a housing recovery. NAMB will continue to work to ensure the consumer will not be hindered or delayed.”

Well. Seems to me that the whole industry is being micro-managed to death by regulations.

I think we need to start over, from scratch. Seriously. Crooks will always find a way, no matter what or how much you regulate – it just makes it harder for the honest person to stay in business. To catch a crook, you’d have less loopholes to contend with, you’d just apply the intention of the underlying law. Of course, you’d need unbiased judges who’d throw out frivolous law suits – but we need them, anyway!

Oh, no – I think I’d better stop. Now! 🙂

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