HVCC Creates Havoc 

Are you confused by the HVCC (Home Valuation Code of Conduct)? Don't feel bad, most people are. This new rule went into affect May 1, 2009 and has done nothing but create havoc for all concerned in a typical real estate transaction.

The original intent of the rule was to create a separation between a lender and the appraiser, so that the lender would not exert undue influence on the appraiser to appraise the property for more than it was worth. Sounds good on paper, but on the street it creates confusion and tension between lenders, buyers and their agents. NAR has lobbied Congress to impose a moratorium on the rules, so that everyone could obtain a better understanding. As of this date, the rules are still in place.

Without going into the complicated and gory details, there is one misconception that impacts agents. Many believe, since they have been told this, that they cannot talk to or interact with the appraiser, give them comparables or assist them in any way. That is flat-out; not true… The HVCC does limit the lenders ability to talk to the appraiser, but does not limit the agent's ability to do so. Thus, we may still meet the appraiser at the property, provide them comparables or other data and assist in the process. We may provide updates comparables after an appraisals is done, just as we always have. If you attempt to do just that, and the appraiser tries to stop you, remind them that the HVCC rules allow for this.

Our National Association has an excellent flow chart dealing with the HVCC and can be found at http://www.realtor.org/wps/wcm/connect/f57e63804e57784890e4b3d4f1772a7a/HVCC+Flyer+6.16.09.pdf?MOD=AJPERES&CACHEID=f57e63804e57784890e4b3d4f1772a7a