One Year of HVCC & My Son’s Birthday

It’s my youngest son’s birthday tomorrow and it’s also the one-year anniversary of the Home Valuation Code of Conduct. People ask me all the time what I think about HVCC, so I figured on the eve of twelve months of HVCC, it would be appropriate to have a little discussion. In short, I think the Home Valuation Code of Conduct has been difficult for the appraisal industry, the consumer, and the real estate industry.

Appraisers definitely make less money now for loan work. I know, who cares, right? But listen between the lines because what if the government stepped into your industry and said you could no longer do business with clients you’ve had a relationship with for years. Many appraisers have gone out of business because their client-base was swept under the rug last year when HVCC was implemented.

Secondly, the consumer pays more for a real estate appraisal now. Under the direction of HVCC, appraisals geared toward Fannie Mae & Freddie Mac cannot be ordered directly by a lender or broker, but must be ordered from a neutral third-party (often times an AMC – Appraisal Management Company). These companies charge the consumer more than what an appraiser would typically charge, and many times pay the appraiser quite a bit less than what is customary in the market. There are some upstanding AMCs out there that I am thankful to do business with, but on the other hand it’s too bad to see some companies really taking advantage of the situation at hand. For example, I received an email yesterday from an AMC offering appraisers $125 for an appraisal order, while their website shows fees at nearly $500.

Lastly, HVCC has definitely impacted the real estate market. Since appraisers cannot be chosen directly by lenders, loan officers or brokers, the best appraiser for the job may no longer be hired. One might make the case therefore that there is a serious issue right now with the quality of real estate appraisals because of less experienced appraisers being hired to complete appraisals they are not as qualified to do. That’s definitely the case, but on the other hand I also think HVCC has been a bit of a microscope to the appraisal industry in some regards because it has illuminuated some shoddy work in the appraisal field.

Ultimately, I’m thankful that HVCC only applies to loans geared toward Fannie & Freddie (HUD/FHA has something similar in place now too). I still do many appraisals for investors, Realtors, and home owners, and these types of valuations are NOT affected at all by HVCC. Of course I’m not immune to some of the consequences of HVCC as I mentioned above, and the whole thing upsets me, but I’m choosing to focus on other things. I may be limited in business right now with what I can do for loan appraisals, but I can still chase other avenues of appraisal work such as bankruptcy, divorce, estate settlement, investor valuations, and assignments from local governmental agencies. In fact, just yesterday I had another Sacramento estate settlement retrospective appraisal come my way.

I know this almost sounds like a positive spin, but there is something philosophical here for me because it’s about focus. HVCC has been a sincere difficulty, but focusing all my attention on it and being negative won’t do me any good (and it won’t pay the bills either). Therefore HVCC won’t define me today, and it won’t be fuel on the fire tomorrow either on the one-year anniversary. Tomorrow I’ll be burning some hot dogs on a grill, enjoying the company of family as we celebrate my youngest son’s birthday, and intentionally not focusing on HVCC.

I’d like to hear from you as a real estate agent, consumer, or appraiser. How have you seen HVCC impact the real estate market over this past year?


  1. says

    Awesome summory of HVCC and its impact on our profession. I’m with you though, I would rather celebrate God’s greatest gift: our children, rather than moan and complain about how hard it is now with HVCC. While you’re at it, burn one of those hot dogs for me too.

  2. says

    The HVCC is an abomination for the real estate market, for more reasons then I care to list. I couldn’t agree with you more. The day will come when this will be repealed or toned down. However, your point about a positive spin is well appreciated. It forced me to focus on my business instead of working in my business. By the end of May I’ll have taken 80+ hours of continuing education, to help better prepare for other types of business. The mortgage side of this business is going to end-up with the least qualified appraisers, which will only add to the frustrations the industry is already going through. I appreciate your posts Ryan, keep up the good work.

    • says

      Good for you Michael to take so many classes. I agree also that the mortgage side of the business is not looking too pretty right now. In light of all that has been going on in the industry, we’ll have a shortage of appraisers some day because the field is difficult to break into now.

  3. says

    Good job, Ryan. Good synopsis of the effects of the HVCC and good decision on your part not to make it the focus of a bunch of anger and complaining. Your way is better. Happy Birthday to your son, too.

  4. says

    Great Post Ryan. You got it right “but I can still chase other avenues of appraisal work”. There is other business out there and this is a great time for local real estate appraisers to define their niche markets and become the expert of those markets, just like you do with this blog. Keep up the great work!

  5. says

    Ryan- very good take on “it” Ryan. I appreciate other’s comments and solutions.

    Belated happy birthday to your son- tomorrow I pick up my boy from the airport as he is finally OUT! He’s been an Army Engineer and in Iraq twice, almost a total of 30 months.

    What I see from hvcc is doing away with appraisers. If anyone has noticed, banks are asking for Broker Price Opinions more and more because, as one of my former clients told me, “its too damn difficult to hire an appraiser, especially one who knows what he’s doing. Besides, the brokers are quicker and its actually cheaper.”

    I’ve been a residential appraiser for more than 35 years now and I’m actually looking forward to either activating my brokers license or switching fields entirely. I’ve always loved my job but now feel I’ve become no more than fodder for the “who’s cheapest and quickest” thinking. I’m getting so tired of supposed quality control departments that think a good review of a report is just making sure every box has something in it, whether its supposed to or not. I’ve reviewed work that I swore must have been completed by some high school kid playing at his dads computer.

    Sorry to ramble, I appreciate your take on it and wish you well.

    • says

      Hal, thanks for the comment. You’ve been in the business for quite some time. I think you are in touch with what so many appraisers across our country are feeling right now. The industry is indeed changing before our every eyes. Loan business is not what it used to be and the future of it is so uncertain.

  6. says

    Hey Ryan, great post and good insight into the impact of HVCC on your business and your market. I’m like you, I feel your pain but also see some positives. The pain was losing all of those mortgage clients that I’d built up over the past 16+ years. The positive is less pressure from mortgage lenders and especially the Realtors, who seem to tend to list at whatever the seller wants versus what the market will support (at least in my market). I find now that my opinion of value, now including the 1004MC, is less questioned and I’m receiving more support from Chief Review Appraisers upon turning in repors.

    On the flip side, there are always 2 to 3 real estate professionals involved in most home sales (agents and appraiser) and eliminating the communication between the listing agent and appraiser is sometimes unfortunate. Appraisers don’t always see what local Realtors see in a market. When setting up the appraisal appointment, I still do ask the listing agent for their comps and tell them that after the initial inspection, all communication is over.

    Appreciate You and Glad You Shared Your Experience! Bill

  7. says

    Fantastic Post about the impact of the HVCC. This has become a daily topic in our household, and sometime it is hard not to get depressed about it. We’re keeping our chins up and looking forward to the day, some day, when the HVCC is a thing of the past.

  8. Glennplake says

    The rules REPLACING the HVCC will be very similar, although they haven’t been agreed upon yet. The HVCC never had a chance in my town. We accepted the lower fees but WE CUT THEIR VALUES! They eventually got the point. We laugh about it all the time. “Cut it and forget it”. The AMC’s are getting what they paid for. What appraiser in his right mind would give FULL market value for half the fee? NO ONE!

    • says

      I hear what you’re saying, but if an appraiser accepts an appraisal request, regardless of the fee, he/she is accepting responsibility for the work (and liability). I don’t think the quality will be anywhere near good when $175 is paid out for a full appraisal, but the appraiser accepting that work better be doing a good job (probably not though).


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