Share your thoughts and experiences on HVCC! I'm very happy about the arrival of HR 3044. I think a moratorium has great potential to alleviate the issues we face today, but more importantly can be a launching point for re-writing or fixing HVCC in the future.
Mortgage Broker Forum » HVCC - Forum
The Official HVCC Thread
(9 posts)-
Posted 1 year ago #
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As a Certified Appraiser who has been in this business for 14 years, I can say that I've never seen anything hurt our industry like the HVCC. If the H.R.3044 passes, I can get my clients back, and stay in this industry. I can't work for half of my regular fees and stay in business. AMCs are robbing the home owners and the appraisers, and the quality of the appraisal report is suffering greatly. The government needs to just let us do our job. Put more money into reviewing appraisals and get rid of the bad eggs out there. Let the ones of us that are experienced professionals, that take pride in our job, just get back to work.
Lori Kaiser
Kaiser Appraisal Services, Inc.Posted 1 year ago # -
A number of lenders have created their own “Appraisal Management Companies” as there is no regulation for the Management Companies. The lenders are requiring that their management companies are used to order the appraisals and will not take appraisals from other management companies event thought the appraisals are certified HVCC compliant. How this effects the consumer is there is no portability for appraisals the have paid for. If a loan is declined from one lender and the consumer wants to apply with another then they are forced to pay for an other appraisal even though the initial appraisal is HVCC compliant. Lenders are abusing this legislation to fatten their pockets. The lenders “AMC’s” charge hefty “review” fees along with credit card fees and “quality control “ fees. So a typical appraisal that would cost $325 now cost $434.56 with over $100 charged by the Management Company. The consumer now is forced to pay 34% more for an inferior product and service. I currently have clients that need to change lenders but have to pay for additional appraisals in order to be underwritten. Despite the initial appraisal being HVCC compliant. This legislation is already being abused by lenders taking advantage of all the loopholes
Posted 1 year ago # -
I want to start by saying if there is an issue with the report, an appraiser is to blame, not the AMC. The AMC is a go-between for appraisers. There are problems with the system. There will always be problems as long as the government is involved. There are several things you must understand before stating HVCC is bad.
1. The AMC is not the issue, They are working to get the report to the client/broker as soon as possible. They are a processing center to ensure a file goes to the lowest bidder.
2. AMCs don't choose the fees for the appraisers. They make the appraisers act in a competitive nature to ensure fair fees are quoted. Many appraisers do not like that they have to set a fee and use it constantly. FREE MARKET makes sure the people who do their work and keep their fees low will always have business. If you want to get in the game, talk to your AMC rep about decreasing your fees or tightening your turntime. The appraiser holds the cards, The AMC Makes sure only the best players sit at the table.
3. We wouldn't be in this situation if brokers would make sure they didn't harass the appraiser and try to influence value. Working for an AMC, I see this all the time. I have been threatened by brokers, the lender I work for has been threatened by brokers, and my company has recieved rude e-mails from brokers. The AMC is only necessary because brokers try to push value. If you have an issue with a report coming in too low, you can submit a reconsideration of value form along with 5 comparables for the appraiser to consider. The appraiser has to justify why the comparables aren't valid or were not used. If the comparables are good ones, the appriaser will incorporate them into the report and send it to you with an increased value. The only difference HVCC is making is that it is impossible of brokers to yell at the appraiser or to threaten them without serious recourse or possible loss of license. In the words of Martha Stewart, IT'S A GOOD THING!!!
In conclusion. Brokers have caused the need for a Home Valuatoin Code of Conduct. The value of a home should not be influenced by a broker, lender, or borrower. If you are an appraiser who lost business, it is because you were inflexible. A business is only as strong as it is flexible. If you cannot yeild to change, you will break and cease.
TO THE BROKERS- Be nice and ask for information. Any AMC will tell you, the nice ones get put to the front of the line. The mean ones get the bare minimums done.
TO THE APPRAISERS- Make your fees competitive. There is nothing stating you cannot call the next company and ask them what fees they are comfortable with. If everyone wants an increase, you can change your fees. GET YOUR WORK IN. A five day turntime is not that hard, stop playing games and do it.
TO THE BORROWERS- I am greatly sorry you have to go through this. You are the only victim in this. BUT KNOW, an AMC will only charge about 75-100 extra on top of the appraiser's report. Make sure you do not ask the appraiser about the value, and if you think the report is wrong, contact your realtor and tell them they need to submit a request for alternate comparables. The AMC will not assist you in filing a reconsideration of value form. This must come from the broker.
Thanks,
CraigPosted 1 year ago # -
CARIG - READ MY RESPONSE TO THIS EXACT SAME POST ELSEWHERE IN THIS FORUM. YOU ARE A PAID AMC SHILL.
Posted 1 year ago # -
CRAIG - READ MY RESPONSE TO THIS EXACT SAME POST ELSEWHERE IN THIS THREAD. CAN'T YOU THINK OF ANYTHING ORIGINAL?
Posted 1 year ago # -
The HVCC was created with good intentions, however the general consensus among mortgage industry professionals is thumbs down. I have personally been affected by this code in many ways. I've seen my clients get thier credit cards charged excessive amounts, and have thier mortgage rates raised because of a low estimate of value. It's very sad, and affects a mortgage professionals ability to provide the highest level of customer service because you just never know whats going to happen when you order that HVCC appraisal. In addition I've had clients required to pay for 1,2, and even 3 appraisals because each lender is only working with certain designated AMC's and will not accept another AMC's work. If I'm planning to obtain a loan for a client who is close to the breaking point on qualifying for a mortgage because of thier loan to value ratios being tight I recommend going with FHA. In today's market where everything is questionble an FHA refinance may be the difference between making a loan work, or not.
Jason Estes
Voyage Home LoansPosted 1 year ago # -
Mr Estes i couldnt agree with you more. Its so funny how Banks and investors always win! When the market is booming they find creative ways to get you into loans.. bend guidelines to the max! BUT when the market is declining they pucker up tight as ever! In this market mnore then ever working with companys that are seasoned in their relationships with their lenders are even more important!
N. Peter
Voyage Home LoansPosted 1 year ago # -
It overwhelmingly impacts small lending institutions and independent appraisers to the detriment of consumers.
a) Consumers will have to pay more for their appraisals to have them completed by AMCs. b) The exclusive use of AMCs limits competition in the marketplace, leaving the consumer and independent appraisers at a disadvantage.
c) The AMC model is flawed and will produce poor quality work that will create a continuation of the declining housing market.
2) The manner in which lenders will collect fees in compliance with the HVCC is a potential violation of RESPA.a) Lenders may be in direct violation of section 8(b) of RESPA due to possible up-charging and fee-splitting. Every lender will be at risk of HUD action on every brokered loan they underwrite.
b) Lenders will not utilize brokers for fear of potential RESPA violations. In addition, those lenders who only do brokered loans will go out of business all together, and competition within the marketplace will cease to exist. Again, at the detriment of consumers.3) There already exists pervasive federal regulation of the mortgage lending industry's acquisition of real estate appraisals.
a) FIRREA - In 1989, following the savings and loan crisis, Congress passed the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA"), which established a multi-faceted real estate appraisal regulatory system involving the federal government, the states, and The Appraisal Foundation. Since 1989, the federal agencies responsible for regulating financial institutions have promulgated regulations under FIRREA that set forth "generally acceptable appraisal standards," and have issued guidance relating to real estate appraisals, which, among other things, set forth standards for selecting qualified appraisers. These regulations and appraisal guidelines both prohibit improper influence on appraisers and work to ensure appraisal independence.
b) FRB Final Rule - In July 2008, the Federal Reserve Board ("Board") issued a final rule prohibiting all mortgage brokers, mortgage lenders and their affiliates "from coercing, influencing, or otherwise encouraging appraisers to misstate or misrepresent the value of a consumer's principal dwelling." In issuing this final rule, the Board concluded that "[no] particular procedure for ordering an appraisal necessarily promotes" fraudulent appraisals. Rather, the Board determined that the "coercion of appraisers," whether by lenders or mortgage brokers, "is an unfair practice" and the final rule should apply to lenders and mortgage brokers alike. NAMB fully supported the Board's final rule because it targets problematic practices, rather than business relationships that present no inherent problems.
c) FFIEC Interagency Guidance - On November 19, 2008, the FFIEC regulatory agencies issued proposed revisions to the "Appraisal and Evaluation Guidelines," and requests for comment. The FFIEC regulatory agencies are currently reviewing the submitted comments and plan to issue a final rule this year.
d) H.R. 1728 - "The Mortgage and Anti-Predatory Lending Act of 2009" was introduced on March 26, 2009. TITLE VI of the bill - APPRAISAL ACTIVITIES - deals with every facet of the appraisal process that will ensure true appraisal independence and protect consumers.4) The HVCC fails to comply with the Administrative Procedures Act.
The HVCC is a substantive rule that created de facto regulation of the entire mortgage industry in violation of the Administrative Procedure Act ("APA").
a) The FHFA is an agency and the HVCC falls within the definition of a rule under the APA. As such, the FHFA was required to utilize notice and comment rulemaking proceedings under the APA, but the agency failed to do so.
b) Because this rule regulates the entire mortgage industry and the FHFA failed to follow proper rulemaking procedures, we believe the HVCC is void, invalid, and unenforceable.Its impact on Consumers:
A. The HVCC negatively affects consumers by increasing the costs to consumers for an appraisal, reducing consumer choice and adversely impacting a consumer's ability to obtain a reliable and quality appraisal.
B. The HVCC creates a heightened risk for consumers by requiring the use of unregulated Appraisal Management Companies (AMCs) for appraisals. The original investigation that prompted the HVCC's creation was of an AMC and WAMU alleging that they engaged in practices of pressuring appraisers on behalf of WAMU.
C. It increases the time to fund loans for consumers which necessitates longer rate locks or extensions of existing locks thereby increasing costs to consumers. In the case that a new lender or broker is chosen, a new appraisal will be necessitated, increasing the time to fund.
D. It restricts the portability of an appraisal since each lender, in effect, will require a new appraisal.
Its impact on Small Business:
E. The HVCC squeezes out small business professionals that are striving to survive and have been working with consumers in the very neighborhoods where they are looking to purchase homes.
F. The HVCC affects small business appraisers, mortgage brokers, Realtors and lenders in all 50 states without having been reviewed by ANY state or federal legislature or agency.
G. Small business professionals who have indepth knowledge of local market conditions are being sacrificed for large AMCs who operate on a national scale to distribute orders through a primary processing hub or hubs which can be located up to thousands of miles away from the property being appraised.
Its failure to comply with procedural law:
H. Although the HVCC is broad regulation having a significant impact on small businesses and consumers, it did not go through the Administrative Procedures Act, the Regulatory Flexibility Act or other procedural laws as required by any regulation issued by a federal agency.
I. FHFA claims that as Conservator of the GSEs, its actions are not "agency actions" under the APA and that its actions are "expressly precluded from judicial review" as a result of the Housing and Economic Recovery Act.
Appraisal standards exist:
J. The Federal Reserve issued appraisal independence standards through Regulation Z being implemented this October which applies to every industry participant.
K. The banking regulators issued interagency guidance on appraisal standards which are expected to become final this year.Posted 12 months ago #
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