Last week, a House of Representatives panel passed HR 3126 by a 39 to 29 vote to establish a regulating agency for financial products marketed and sold to US consumers which included an amendment to phase out the Home Valuation Code of Conduct.
The amendment would allow all originators, licensed or registered in accordance with the SAFE Mortgage Licensing Act, to order appraisals directly.
The provision introduced by Rep Gary Miller, is part of an effort to call on regulators to streamline existing appraisal rules into a single set of standards. Regulators could then “sunset” and retire the HVCC, according to a statement from Rep. Miller’s office.
“While I am supportive of ensuring accurate appraisals, I have repeatedly expressed concern that the HVCC has potential to increase costs to consumers, significantly hinder a consumer’s ability to obtain legitimate and reliable appraisals, and adversely impact small business professionals who work in the very neighborhoods where these consumers are looking to purchase homes,” Rep. Miller said.
“In fact, since the implementation of the HVCC on May 1,” Miller added, “there are numerous examples of higher costs for appraisals, poor service, the inability to use one appraisal for more than one lender, questionable quality of appraisals, and the inability to make corrections to inaccurate information on an appraisal report.”
Next HR 3126 moves on for consideration by the full house and if signed into law, HVCC would become ineffective on the day of the CFPA completes a rule making process to establish standard codes for appraisal independence.
Should the bill become law, the Federal Housing Administration could change its stance on ordering appraisals which it established in September. While FHA doesn’t require the use of AMC’s, its policies are consistent with the HVCC.