HVCC, the home valuation code of conduct [MESS]
Let's face facts. During the housing boom, appraisals came in higher and higher. Lenders not only didn't care whether borrowers could repay a loan, they basically didn't seem to care if a property was properly appraised.
It's a brand new day and of course, the government has stepped into the picture.
What is the HVCC - The Home Valuation Code of Conduct from Freddie Mac
"The Home Valuation Code of Conduct (the Code) is the result of a joint agreement made in March 2008 between Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General (Andrew Cuomo) to enhance the independence and accuracy of the appraisal process." (name of NY Attorney General and my emphasis added)
The always wonderful Kris Berg writes about The HVCC and the appraisal mess.
"My latest article for Inman News spoke to the new rules for appraising properties ushered in through what is known as the Home Valuation Code of Conduct, or HVCC. The comments on that post and the firestorm of emails I received as a result all shared the same sentiment - bad idea." (emphasis added)
Larry Cragun at RealEstateUndressed is none too happy about HVCC either. Read The appraiser part of the process is broken and How long did it take to get the appraisal completed.
And what does appraiser extraordinaire Jonathan Miller at Matrix have to say.
"Mortgage fraud is still happening. I can speak for the appraisal portion of this process. Aside from dealing with fewer mortgage brokers due to the Home Valuation Code of Conduct or (HVCC), NOTHING HAS CHANGED.
There is pressure – the lenders are dealing with appraisers who play ball and appraisal management companies are eliminating competency in valuation of collateral for mortgage lending."
And in a somewhat related post, How the government can fix the foreclosure crisis, PhoenixRealEstateGuy, Jay Thompson suggests the government should do nothing and let the free market work.