By Bill Grasska, Teles Financial/ www.telesfinancial.com

Everyone in Real Estate has heard of the new HVCC appraisal guidelines.  HVCC stands for Home Value Code of Conduct. The guidelines were set up to keep appraisals unbiased and keep undue influence from realtors, mortgage brokers and other interested parties from biasing the appraised value.

HVCC guidelines called for lenders to setup “pools” of appraisers and systematically go down the list, in order, selecting from the next appraiser on the list.  This was supposed to take out the ability of the Loan Officer or Realtor, from being able to select a specific appraiser.

Licensed appraisers have their own ethical code of conduct.  Appraisers have to be able to support a given value by actual data.  In the lending process almost every appraisal before the HVCC was reviewed by a review appraiser.  The review process is still in effect after HVCC.

HVCC has simply weakened the process.  Instead of being able to select the best appraiser for the job, it has to be ordered in “order”.  This means the possibility of having an appraiser who has no actual knowledge of a specific area coming to appraise a property.  “Unbiased”? More like “Unprofessional”.

Previously when a lender selected an appraiser they did so based on knowledge of the area, time frame to complete the report, competency and yes lowest cost to the client.  Lenders actually selected the best appraiser to do the job.  With the new HVCC guidelines mortgage lenders have to take the next appraiser on the list, irrespective of area knowledge, cost, or time frame to complete.

HVCC will be successful in one area and one area only, standardizing the mediocrity of the appraisal process.

For more information, please contact Bill Grasska at 310-442-4040 or email him directly at bgrasska@telesfinancial.com.

Filed under: Industry and Economic News, Uncategorized on July 24th, 2009