Dear Local Buyers & Agents in the Greater Sacramento Region-
The Home Valuation Code of Conduct (HVCC) is a new law that went into effect on May 1, 2009. What this law aims to do is eliminate pressure from loan departments on appraisers to arrive at a certain conclusion of value. One of the biggest changes since HVCC took root is that loan departments can no longer directly communicate with the appraiser about value-related issues and so they must use an appraisal management company (middle man who takes away part of the appraiser’s fee) or work out some other arrangement to have an in-house department that handles appraisal ordering. As you can imagine, this has certainly changed business for many appraisers as well as loan officers and banks because many of our business contacts are no longer viable sources of connection for doing business. Everyone is adjusting and there are many people who are unhappy at the process.
THE GOOD NEWS though is that when FHA financing is being used, the buyer, agent or broker can readily choose whatever appraiser he/she wants because HUD is not bound by HVCC. In a market full of FHA financing, it is still possible then to work with any appraiser you want to.
NOTE: Home owners, lawyers, investors and others can hire a real estate appraiser any time they want to. If the purpose of the appraisal is not a loan geared toward Fannie Mae (eventually sold to them), then the Home Valuation Code of Conduct DOES NOT apply at all. There has been some confusion on this matter since May 1, 2009, but the truth is that HVCC only applies to loans that may eventually be sold to Fannie Mae. I do appraisals for estate settlement, divorce, property tax appeal, bankruptcy, second opinion of value, home-repair loan programs, litigation and other purposes that have nothing to do with a loan geared toward Fannie Mae. Thankfully in these cases I am able to work directly with home owners, investors, agents or local governmental agencies among others.
Please let me know if you have any questions. Thank you.
Your local appraiser,