WSJ: Mortgage Brokers and Realtors Trying to Kill HVCC

NewImage.jpgThe Wall Street Journal is reporting that mortgage broker and the real estate industry is pushing to kill the Home Valuation Code of Conduct (HVCC) through pending legislation to overhaul financial-sector regulation.

Adopted in May 2009, HVCC was meant to ensure appraiser independence by banning mortgage brokers and bank loan officers from selecting appraisers. Mortgage brokers and realtors complain that the rules have produced low-ball appraisals that have blown up deals, while appraisers argue the change has harmed appraisal quality.

Mortgage lenders, on the other hand, are trying to fend off the measure. Several big lenders own or have a stake in companies that have seen a surge in business as a result of the new rules. “We’re going to try all we can to keep it out,” said John A. Courson, the Mortgage Bankers Association’s president and chief executive officer.

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Reverse mortgage brokers would also enjoy seeing an end to HVCC.  Since enacted, brokers have been required to use appraisal management companies and the results haven’t been good.  “They have driven costs up, the work is marginal, and the response times are terrible,” said Jack Belles, CEO of Reverse Mortgage of New England.

Prior to the new regulations, Belles said the company typically paid $350 for a Federal Housing Administration appraisal.  Now, they’re paying anywhere from $450.00 to $550.00 and sometimes as high as $650.00 he said.

Things could change if the final version of Wall Street reform includes language passed in the House, which included a measure to direct federal regulators to come up with an improved set of rules.  The language, however, didn’t make it into the most recent draft being used as a basis for House and Senate negotiations said the WSJ.

Lawmakers are expected to turn their attention to the appraisal rules and other mortgage provisions this week.

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  • Andrew Cuomo went too far. HVCC hurt borrowers and originators and lenders when the originator could no longer call up any appraiser for comp searches for a prospect’s property.rnrnPost HVCC, this means that the borrowers pay up-front for an appraisal that costs more, takes longer, is frequently deficient in accuracy and quality, generates more underwriting conditions, takes longer to clear, and may be impossible to close at all. The net result: more work for all with less predictability regarding a successful outcome. Nice fix…

  • We in the mortgage broker community are indeed fortunate to have the support of the National Association of Realtors in our effort to sunset HVCC. nnAs a member of the MBA, I am disappointed to see that organization has taken a position that would benefit only its largest members, which includes commercial banks and the largest mortgage banking firms, and is contrary to the interests of many of its members, which include mortgage brokers and smaller mortgage bankers who do not own subsidiary AMCs.

  • HVCC does not apply to FHA loans. FHA created their own policy modeled after HVCC but its seperate and slightly different.rnrnHVCC as a law will sunset in the fall. However, it is likely Fannie and Freddie will continue to require some version of appraiser indepence regulations. rnrnAs far as FHA is concerned, they would have to take a seperate action to drop Mortgage Letter 09-28.

  • Andrew Cuomo went too far. HVCC hurt borrowers and originators and lenders when the originator could no longer call up any appraiser for comp searches for a prospect’s property.rnrnPost HVCC, this means that the borrowers pay up-front for an appraisal that costs more, takes longer, is frequently deficient in accuracy and quality, generates more underwriting conditions, takes longer to clear, and may be impossible to close at all. The net result: more work for all with less predictability regarding a successful outcome. Nice fix…

  • We in the mortgage broker community are indeed fortunate to have the support of the National Association of Realtors in our effort to sunset HVCC. nnAs a member of the MBA, I am disappointed to see that organization has taken a position that would benefit only its largest members, which includes commercial banks and the largest mortgage banking firms, and is contrary to the interests of many of its members, which include mortgage brokers and smaller mortgage bankers who do not own subsidiary AMCs.

  • HVCC does not apply to FHA loans. FHA created their own policy modeled after HVCC but its seperate and slightly different.rnrnHVCC as a law will sunset in the fall. However, it is likely Fannie and Freddie will continue to require some version of appraiser indepence regulations. rnrnAs far as FHA is concerned, they would have to take a seperate action to drop Mortgage Letter 09-28.

  • HVCC does not apply to FHA loans. FHA created their own policy modeled after HVCC but its seperate and slightly different.

    HVCC as a law will sunset in the fall. However, it is likely Fannie and Freddie will continue to require some version of appraiser indepence regulations.

    As far as FHA is concerned, they would have to take a seperate action to drop Mortgage Letter 09-28.

  • We in the mortgage broker community are indeed fortunate to have the support of the National Association of Realtors in our effort to sunset HVCC.

    As a member of the MBA, I am disappointed to see that organization has taken a position that would benefit only its largest members, which includes commercial banks and the largest mortgage banking firms, and is contrary to the interests of many of its members, which include mortgage brokers and smaller mortgage bankers who do not own subsidiary AMCs.

  • Andrew Cuomo went too far. HVCC hurt borrowers and originators and lenders when the originator could no longer call up any appraiser for comp searches for a prospect's property.

    Post HVCC, this means that the borrowers pay up-front for an appraisal that costs more, takes longer, is frequently deficient in accuracy and quality, generates more underwriting conditions, takes longer to clear, and may be impossible to close at all. The net result: more work for all with less predictability regarding a successful outcome. Nice fix…

  • HVCC does not apply to FHA loans. FHA created their own policy modeled after HVCC but its seperate and slightly different.rnrnHVCC as a law will sunset in the fall. However, it is likely Fannie and Freddie will continue to require some version of appraiser indepence regulations. rnrnAs far as FHA is concerned, they would have to take a seperate action to drop Mortgage Letter 09-28.

  • We in the mortgage broker community are indeed fortunate to have the support of the National Association of Realtors in our effort to sunset HVCC. nnAs a member of the MBA, I am disappointed to see that organization has taken a position that would benefit only its largest members, which includes commercial banks and the largest mortgage banking firms, and is contrary to the interests of many of its members, which include mortgage brokers and smaller mortgage bankers who do not own subsidiary AMCs.

  • Andrew Cuomo went too far. HVCC hurt borrowers and originators and lenders when the originator could no longer call up any appraiser for comp searches for a prospect’s property.rnrnPost HVCC, this means that the borrowers pay up-front for an appraisal that costs more, takes longer, is frequently deficient in accuracy and quality, generates more underwriting conditions, takes longer to clear, and may be impossible to close at all. The net result: more work for all with less predictability regarding a successful outcome. Nice fix…

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