HVCC…I’m not making this stuff up

I’m closing my first conventional purchase that falls under the rules of HVCC (a majority of my transactions have been FHA) which became effective at the beginning of this month.   Today I was asked by the Real Estate Agent, in disbelief:

“If I understand you correctly:

  1. We don’t know who the appraiser is
  2. We cannot contact the appraiser even if we knew.   [Note:  the real estate agent CAN contact the appraiser if they somehow know who it is…the loan production staff cannot].
  3. We have no idea when the appraisal will be done”

Yep.  In a nutshell, people who are considered a part of “loan production” including mortgage originators and loan processors have no idea who the appraiser is until we receive it from said appraiser with conventional financing.

HVCC does not prohibit the real estate agent from communication with an appraiserHowever, unless the appraiser contacts the agent to schedule an appointment there will be no way for a real estate agent to know who the appraiser is.

Note to Real Estate Agents:  please keep this in mind when you are writing up offers with conventional financing.  The mortgage originator has no contact with the appraiser and therefore, the Letter of Loan Commitment that is typically required within 20-30 days may still be subject to appraisal or the underwriter’s review of the appraisal.   We can request the appraisals are provided to us by a certain date; but I cannot contact the appraiser to say “what’s the e.t.a. on the Jones appraisal; we really need it by Friday”.

Currently FHA is not following HVCC however, FHA has been adopting some of Fannie Mae’s other appraisal guidelines and addendums.

Are we having fun yet?

260 thoughts on “HVCC…I’m not making this stuff up

  1. Timely….

    I was going to post this link of the old HVCC rant, but the new one is even better.

    The class action lawsuits are just beginning.


    Here’s another


    The thing that cannot seem to get borrowers to understand is that this is a rip-off of THE PUBLIC, not just a business turf war.

    Oh well, at least lawyers will make money…

  2. Used to be when we didn’t get a call from the appraiser in the first few days, we thought someone was intentionally holding it up, and it sent up a red flag. Important for agents to know that we’re starting to see appraiser in at day 15, and that DOESN’T mean what it used to mean.

  3. We’ve been “compliant” for about 20 days now with mixed success. We are getting appraisals in reasonable amounts of time (about 5 days). In review though, they are coming in very conservative and that is worrisome. I have even had one come in lower than Zillow…. the hardest part of this is that you get no idea if you are even close to value before you charge the client. also, there is no “portability” from one lender to another. Also, from what we are reading, when the inter-agency guidelines come out this later this year, FHA is expected to adopt the same process.
    To many what-ifs when you order for a refinance now.

  4. Ardell, if an appraiser comes in at 15 days, it really impacts the Loan Commitment Letter if it’s to be provided in 20 days factoring the time it takes an appraiser to complete the appraisal (provide comps and type the appraisal) and for final underwriting review of the appraisal (w/any other outstanding conditions).

    This is a key point of this post–if agents are asking for a Commitment Letter in 20 days of mutual acceptance of contract and expecting a clear letter; they’re pushing it. Many lenders are not ordering appraisals or locking without an (application and/or appraisal) deposit and underwriting is taking longer. I’m hoping that lenders are prioritizing purchases over refinances; but even so–the process is taking longer in this market compounded by HVCC–no way to communicate w/the appraiser. When the appraisal is ordered, a lender can say “we need this in X days” but there is no incentive for the appraiser to provide it in that time–especially if they are working for an AMC where they have lost 40-60% of their income (the AMC’s collect a majority of the appraisers fee JUST FOR ORDERING THE APPRAISAL–they have NO accountability or liability for the appraisal–PURE PROFIT for the owners of the AMC).

  5. Pingback: HVCC is Up and Running. How’s it Going? — Lenderama

  6. My experience with working with the HVCC rule is just horrible. None of our local appraisers are apparently members of the third party appraisal management companies used by our lenders so as a result, appraisals are taking a ridiculous amount of time and they are being done by out of area appraisers who know nothing about the local market. In addition, the Hood Canal Bridge is out until mid-June so I am sure the appraisers coming from the Seattle area will be charging an extra fee for “driving around.”

    The appraisals are already costing the consumer more! This is just an outrageous situation and is not working and the Realtors need to get involved with the lobbying and class action suits to get this rule changed as soon as possible. The rule is helping no one.

  7. I certainly let all of the Realtors I personally know and work with know about it. The HVCC rule will result in greater costs to borrowers, and poorer service.

    While they generally understand the issues, it is natural to prioritize threats, and most Realtors see greater theats to their survival than this.

    Not knocking REs, but their interests are not always aligned with the borrower’s interests. Some do not care that the borrower truly gets a great combination of good rate and reasonable costs (borrower’s do), but primarily care about the completion of the transaction.

    This is natural, and appropriate. Their job is to see the deal get done, and it is not an easy job, these days. You cannot focus everywhere, and not everything can be the top priority.

    The problem, as I see it, will be mostly felt in the refinance arena, where we cannot even communicate the estimate of value to the appraiser. When the value comes in low (and there is plenty of evidence mounting they will come in lower), there is no way for the borrower to recover that money.

    Worse, if the lender/underwriter kills the deal for any reason, the broker cannot move it to a more reasonable lender (in most cases, but there are a few exceptions).

    This is a harmful act commited on the American people, designed to enrich the few, and protect the guilty.

    The truth will emerge, and it will be overturned.

  8. Pingback: Top 5 real estate posts of the day – Friday 5/15/2009

  9. I just wanted to point out that the HVCC does not forbid loan production staff, realtors, loan officers, or anyone else from contacting the appraiser. The lender staff cannot SELECT the appraiser and/or cannot attempt to influence the value.

    The AMCs are taking advantage of their very powerful new position to use scare tactics and threaten both the lender and appraiser if ANY contact exists between them, but that is simply not the case. Logistics often demand that the appraiser communicate with the lender, in particular underwriting staff. My experience is that using the AMC to coordinate any underwriting requested changes will add days onto the process and can often confuse the issues. I’m just happy that my office is booming with direct lender business and that we are mostly free from AMC work. Just an appraiser’s observation.

    FHA ALERT – The lender is now liable for the quality of the appraisals used in FHA assignments (a rule which I love). As a result we have noticed that the lenders in our area (which had moved to AMCs for their other work) will not use AMCs for FHA assignments and instead are getting appraisals from quality shops like mine. If FHA impliments the HVCC you will see a nightmare scenario as lenders become liable for the quality of the appraisal without being able to select the appraiser!

  10. Hey AJ!

    Glad to see you’re work is picking up!

    From FMA FAQ’s

    Does the Code permit an underwriter or processor to contact an appraiser in order to request additional information, seek an explanation about a valuation, or to request a correction of an objective factual error in an appraisal report?

    The underwriter or processor may communicate with an appraiser if they do not violate the requirements outlined in Section III.B of the Code.

    Here is section III.B. (2) is most relevant.

    B. All members of the lender’s loan production staff, as well as any person (i) who is compensated on a commission basis upon the successful completion of a loan or (ii) who reports, ultimately, to any officer of the lender not independent of the loan production staff and process, shall be forbidden from (1) selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender or forbidden from performing such work; and (2) having any substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignment. If absolute lines of independence cannot be achieved as a result of the lender’s small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process.

    It does seem to prohibit the loan originator (who may also act in the capacity of a processor) from communicating directly with the appraiser.

    And it certainly does slow down the process.

  11. Thank you for posting that Roger. I had researched and found that same section after writing my post here. This is the type of unclear statement that we have all come to expect.

    Section (1) is no problem because in our context they have been selected already. Section (2) uses that great phrase “Substantive communications” which is the problem:

    From the Appraisal Institutes Myths and Realities publication

    Myth: Loan Production staff is prohibited from communicating with appraisers. Reality: Loan production staff may communicate with the appraisers, but they cannot be involved in selecting, retaining, recommending or influencing the selection of any appraiser for a particlar appraisal assignment. Further, loan production staff cannot have any “substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignement.

    Considering that the AI is one of the premier sources for information and is regularly consulted by representatives of Fannie Mae and FHA, I think this is a good case against the “no contact” argument, although it is still nice and vague in it’s point.

    I’ll keep looking around and see what else I can find. Until this goes to court or gets changed/reversed/dealt with, it appears to be a debatable issue. Of course the management companies and the banks that own them have their opinion and are in control as I mentioned, so of course they are going to come up with “no contact period” as a policy.

    As long as you are not trying to influence the value and follow the intent of the rules, and can point to sources like the Appraisal Institute you should be fine. It depends on what you are trying to do…

  12. Regarding value checks, you can order something called a “General Purpose Appraisal Report” or “desktop” version of an appraisal. These forms allow the appraiser to open up the scope of work and provide a more limited file which would typically be much more cost effective ($75-100). Check your local appraisal firms and see if they provide them, you might be able to give those to the appraiser, or leave it in a folder for the appraiser. Sometimes (especially if you have an out of town appraiser working for peanuts) the appraiser will take that information and use it in their report (to select comparables). The trick would be to order/receive that limited scope report within a short time frame (1-2 weeks) of the AMC/Lender appraiser performing their inspection.

  13. I’ve already had two deals have problems because of HVCC. None of my lenders are able to communicate with the appraisers. Because of this, we had an appraiser not realize when the appraisal deadline was and most recently, the third party ordering the appraisal took seven days to order it AFTER the processor placed the order to them.

    Not being able to hold any one accountable is a disservice to consumers. I’ve already seen appraisal costs go up $50-$100 this month or in some cases, the appraisers being paid less to pay for the third party intermediary.

    What we need next is an intermediary between the lenders and REALTORS to make sure they’re not collaborating. Maybe the feds or FHA could create a new bureaucracy to protect consumers further?

  14. Derec, how about having the AMC’s disclosue what their take is for merely ordering the appraisal? I think it’s pretty disgusting that they’re taking a huge cut the of the appraisers revenue and I don’t believe that with that they are assuming any liability or relieving the appraiser of any liability.

  15. Substantive = Considerable; substantial

    Why would the Appraisal Institute word their Myths letter the way they did if they felt that “any” communication was substantive? The lawyers will have to work it out, but for now, the lenders and their AMCs are making that decision for you = no contact. If the HVCC intended no contact, they would have said “no contact”, but they didn’t… There must be something there, but it is worded in such a way that we are all getting screwed by the lender/AMC perceived interpretation. If they wanted contact, they would take the other side of the argument in 10 seconds. It is all about control.

    If the HUD was made to include the actual fee the appraiser was paid, the consumer would freak out and put an end to this nonsense. They pay $400-450 and the appraiser gets paid $150-200? What a joke!

    Derec, you are right on: “disservice to consumers” Amen

    It takes 7 days to place an order because they have to find some moron who will write the file for 1/2 of the normal fee and that takes time! If you think that takes time, try getting the contract from these yahoos, or clarification of a question, or a response inside of 3 hours, or getting them on the phone for any reason.

    Some of these shops are outsourcing the work through Asia, and you can tell by the wording of the comments/lack of understanding of basic slang, etc. It sucks away the cycle time as they wait for assignment of the file from the offshore branch. I’m not talking about small shops either, it’s the big ones.

    Like I said months ago, you folks in the trenches and your clients are going to be the big losers. Shops like mine will just shift our work to other client types, like lawyers going after moron appraisers working for $150 a file and screwing up these deals left and right…

  16. They are trying to pass a law that requires the HUD to list what fees are for the appraiser and what fees are for administrative duties (AMC). This law will also require AMC’s to be regulated and pay huge fees, which will only hurt appraisers and consumers more.

    I’m an appraiser who is employed with an AMC.

    From an appraiser’s point of view, the fees are lower but the payment is guaranteed. When I owned my own appraisal firm we had to write off many appraisal fees because we couldn’t collect. Every appraiser has their own views on AMC’s, I’m sure you have talked with several.

    QLS is different from many AMC’s. We are owned and operated by experience appraisers. We do not just order appraisals, we have only appraisers quality check every report. Many times the report is several corrections before it is sent to the client. Some AMC’s send orders to appraisers who will do the job for the lowest fee.

    As far as the communication between the LO/Realtor and the appraiser is to help ensure the HVCC. If anyone (LO, Realtor, Seller, Buyer, Owner, etc.) tries to influence the value either intentional or not then another appraiser needs to do the report in order to be HVCC. This could cost the borrower more money. That is what we try to prevent.

    I’m just giving my experience, please don’t hate me 🙂

  17. Jennifer:

    Why would we hate you?

    Sorry to see that some lenders stiffed you in the past for appraisal fees. Here in WA, LOs would find that it could get them in deep doo-doo with DFI regulators. More than one lender has has their license pulled for non-payment of appraisal fees.

    I have paid for a number of appraisals out of pocket that did not turn into completed loans, before I learned it was necessary to have the borrower pay for the appraisal before it was completed.

    Like you, we LO’s are trying to figure out how to work this new system with the least amount of harm and expense to our clients.

    Most hate the new system, some actively try to fight against it.

    While your AMC may provide a better experience, chances are it does not win the business that the inferior AMC wins, based on the benefits the inferior AMC provides to the selector….THE BANK…generally at the expense of the borrower, the appraiser, and the loan originator!

    I would like to encourage you to join the fight against this grossly unfair system, even while you do your best to survive during it’s hopefully short lived regime.

  18. Jennifer:

    I think there is a place for AMC’s. They existed before HVCC. They provided a certain kind of value to lenders.

    What is wrong is that the AMC’s took over the lobbying arm of the appraisal business, leaving good independent and up-and-coming appraisers high and dry.

    The big, well financed AMC’s wiped out the small guy/gal by regulatory fiat.

    If you prefer life in the Death Star, stay there…

    Or, join the rebel cause…we would welcome you in WA.

    I think the majority of appraisers will play Han Solo (to torture the analogy)…, playing both sides, and ultimately fight for freedom, rather than merely money.

  19. In addition to disclosing what the AMC is paid for ordering the appraisal and what the left overs are for the appraiser… I also think that the ownership interest in the AMC companies should be disclosed.

  20. I’m not sure about the ownership being disclosed. I know that with the new law that is trying to get passed the owners cannot have had any RE license revoked and I think background checks are wanting to be done. The document was long and boring so don’t want to jump back in and re-read it. 🙂

  21. I just got off the phone with one of my clients who is doing a refinance. She was very upset because the appraisal company left a message with her teenage son cancelling the appraisal at the last minute. This was the second time it happended to her.
    The appraisal was ordered through the lenders website and that AMC emailed me to let me know that the inspection originally scheduled for May 18th had been rescheduled to May 23rd and that it was going to take two weeks for the report to be completed. They also sent me an email implying that it was my client who had rescheduled, but that was not the case.
    I have forwarded this information to the lender. But, you can understand my frustration in not being able to call the appraiser out for treating a client so shabbily.
    This is just making life miserable for everyone and most especially the consumer!

  22. The AMC’s need to be held responsible for this but good luck getting in touch with someone with the lender who can made a difference. That appraiser needs to be removed from their list, period. The big problem comes from overloading the appraisers who will take less than $200 for a full report. Unless the property is rural or a unique property it should not take 2 weeks. The appraisers do need time in order to research the property, comps, market, etc. but it shouldn’t take more than a week.

  23. It is not uncommon to charge the card before placing the order with an appraiser. That is how we do it as well.

    However, if the service is not provided that have to refund her money. Can a complaint be filed with the BBB?

  24. “This law will also require AMC’s to be regulated and pay huge fees, which will only hurt appraisers and consumers more.”

    “Some AMC’s send orders to appraisers who will do the job for the lowest fee”

    “As far as the communication between the LO/Realtor and the appraiser is to help ensure the HVCC.”

    “This could cost the borrower more money. That is what we try to prevent.”


    I have some questions for you Jennifer:

    What percentage of AMCs do you think hire the lowest fee appraiser? From my experience we are looking at about 90% using this model, it’s called capitalism with zero oversight/regulation.

    How is allowing AMC’s to remain free of regulation going to help anyone and/or the industry in general?

    Are the review appraisers at your company experienced in the areas that they are reviewing? Are the located in the same State?

    Is your AMC owned by a lender, and if not, how do you expect to compete when Wells Fargo, Bank of America, Citi, and Chase are demanding use of their AMCs for all loans?

    You would need to have a 50% or lower collection loss rate to make the AMC model make sense. My loss rate is closer to 3% and I can live with it! If yours was much higher than 5%, it sounds like you were working with a lot of shady brokers.

    The removal of the corporate independance clause of the HVCC was done at the last minute and contrary to the original intent of the rules. What makes anyone think that the Title Companies/Banks would ever let an independance rule go into effect now that they have complete control of the industry? Given the $ we are talking about, they are going to lobby the hell out of any legislation introduced, the same way they had the HVCC modified to meet their every whim and desire.

    I don’t know what “is to help ensure the HVCC” means, but scheduling does not impact or influence the value. I think we all know that the absolute “no contact” rules you AMCs are imposing is meant to keep ALL control at the AMC, not to ensure no influence. I had a 5 day episode with a lender who wanted original comp photos from gated communities last week. We got the file through underwriting 1 hour before closing. There is no doubt in my mind that working through the AMC for every communication would have taken at least 2 weeks instead of 5 days. How does contact between the loan production staff and the appraiser to resolve and issue like comp photos impact or influence the value? We never discussed value once and we are all adults, and hopefully professionals, and know the difference between discussing value and discussing logistics.

    What is going to cost the borrower more money is multiple appraisals due to poor quality. I know you AMCs make sure the T’s are crossed and the I’s are dotted, but what SUBSTANTIVE review process do you have in place. I can run PAR logic out of ACI and find out that a check box is blank. Do you have the local MLS for the County in which the property is located? Know the market? Have any idea of whether the appraiser has ignored relevant comps? AMC review of appraisals is a joke in my experience. You might have a piece of software that pulls “comps” out of a blind search database, but 99% of the time the “comparables” that software finds is not relevant to the appraisal. Of course, it is hard to know from 1,000 miles away, so therefore I spend hours explaing why these “comparables” were not utilized.

    Am I bitter? You betcha.

  25. I have some questions for Jennifer:

    What percentage of collections were you losing to non payment? If you were losing more than 5% then you must be doing work with some pretty shady clients. I’ve never lost enough to justify 50%+ of the fee being ripped off the front end. Our appraisal firm averages about 3% loss per year on non payment issues. The biggest hit we ever took was an AMC that went out of business (EFS). The HVCC has no mention of what happens to the little guy when AMCs go under like AMCO and EFS (do a Google search on them). The interesting thing is that Cuomo was working for AMCO, and then they stiffed appraisers when they went under.

    Do your review appraisers live/work/know the State, County, or general market they are reviewing? Do they have local MLS? Are they reviewing for technical errors only, and if so, why not just use a software program to check on the appraisers end if they are making so many mistakes? The AMCs allways talk about how many corrections are needed, but I think that the level of rejects at many AMCs could be tied to the quality of the appraisers they are using. As you say “many times the report is several corrections” making me think maybe your appraisers just don’t get it right the first (or second) time because they are trying to rush in order to make a living at $150-175 a file (or something similar).

    “Some AMC’s send orders to appraisers who will do the job for the lowest fee.” = What would be your estimate as to what percentage of AMC placed orders are sent to appraisers based on something other than their fee? My experience leads me to believe the business is 95+% dependant on the appraisers ability to have a heart beat and willingness to work for the least amount of money. The HVCC says that an appraiser SHOULD be selected based on their qualifications and experience. I don’t see that happening, and if we don’t regulate AMCs, it never will.

    How does your AMC expect to compete with the lender/title company owned AMCs given the majority of prime lender’s decision to demand use of only their AMC? You can have the best product in the world, but if your target clients are not allowed to order from you…

    Ownership of the AMCs by banks and title companies is a given now, they obviously had enough power to change the HVCC pre-release (removing the corporate independence clause) and I have no doubt their lobby will continue to do it’s job, contrary to the interests of consumers and the appraisal industry.

    I’m not sure what “As far as the communication between the LO/Realtor and the appraiser is to help ensure the HVCC.” means. I had a logistical problem with comparable photos that took several days to resolve last week. We (the underwriter, processor, and I) got the whole issue resolved over the course of several days and only just 3 hours before closing. What possible impact could a discussion of acceptability of comparable photographs (MLS vs original photos in a gated community) have on the estimate of value? What SUBSTANTIVE influence is achieved by scheduling an appointment?

    Forbidding ALL contact between the appraiser and the client is all about control. It keeps us from talking to eachother and realizing that the order did not get to the appraiser for 7 days, the appraiser got paid 1/3 to 1/2 what the client paid the AMC, etc, etc, etc

    If AMCs took a 20% cut of the fee and just acted as an insulator, I would not be so against them. But taking 50% of the fee and then trying to justify it is a joke.

  26. Let me see if I can answer all of your qustions, AJ.

    I don’t even want to do the math on how much money I lost due to not being able to collect. We had a large client base with several appraisers. The main one that hurt was a new client that we did $16,000 worth of appraisals in six weeks. I’m in the process of sending to a lawyer. Hopefully I can get some of it because I already paid the appraisers.

    We do quality checks for our clients. We make it very clear that we are not doing an appraisal review because we do not know every market. If the lender orders a review it is done by an appraiser in that market. If one is ordered in the Dallas/Ft Worth area, where we are based, we still send it to an appraiser outside of the company. We want to make sure there is no bias what so ever. I think appraisers who do reviews outside of their area should have their license taken away.

    Only appraisers do quality checks for our orders. We do not rely on software because software misses half of the stuff. We believe in quality and you can’t get that without qualified people looking at stuff. Most of the stuff we send back are specific verbiage a client needs, comps within so many days, etc.

    We deal with a lot of FHA Manufactured Homes. I could go on for a long time about these but they are more difficult to do with a limited amount of appraisers willing to do them.

    I would say that 85% of our fees we pay are set by appraisers as well as the turn around times. If an appraiser is going to take 2 weeks to do a report and another takes 5 days, it will go to the one who can do it in 5 days. This effects closings which can cost the borrower if it is delayed. For the conventional in larger metropolitan areas there are more appraisers willing to do for less. We have had appraisers who stated they will go lower than our normal fee if they can be the primary appraiser for an area. We do not go below $250 for a 1004, period. I know that MOST AMC’s pay $175-$200.

    I do think AMC’s should be regulated but the fees that they are fighting for are unreasonable. They want to charge AMC’s $25 per appraiser on their list. This will wipe out all of the smaller AMC’s leaving only the large ones to monopoly the business. This will also make AMC’s limit their list of appraisers to pay less putting some appraisers out of work while the others overloaded increasing turn around times and lowering quality of work. All of this on top of the individual states charging to do business in their states.

    The primary reason we don’t want the lender and appraiser communicating is because of the HVCC. Many times the lender asks questions we can answer it without bothering the appraiser. If they need something corrected we make sure we have any documents the appraiser will need prior to sending. This stops the back and forth. You don’t get this by someone who makes minimum wage without experience.

    Just the simple tasks of scheduling an appointment can violate the HVCC. Many people don’t know they can’t tell the appraiser that they only need $150K to make the deal work. This violates the HVCC but the appraisers have to be able to do this or call the builders for information. It is up to the appraisers to not let anyone influence the value.

    If an appraiser didn’t get an order right away the lender needs to find another AMC. Our are placed the same day unless we don’t have all the documents needed, such as contract, plans, etc.

    An AMC has much more overhead than owning an appraisal business. We do pay better than most and I think that the fees should come from the lenders but in the real world it will not happen.

    I think I answered all but if not please let me know and I’ll address them. 🙂

  27. $16,000 through one client in “a few weeks” had to have been a large lender or an AMC correct? I’m assuming we are looking at about 40+ orders? Most lenders don’t handle that kind of volume in a specific territory in a few weeks. Anyway, that is one client you had a problem with, and if an AMC goes under, any appraisal office will be in same boat no? How does this “solve” the problem, and why is it worth half of my fee again?

    Comps within so many days and comments that are required are specified by industry standards and the scope of work. It is the underwriter’s job to review those aspects, and by trying to get in the middle of that part of the process, the AMCs are slowing down the process. If the appraiser is not following the scope of work or industry guidelines, then they are doing a poor job and should be taken off the approved list.

    I appreciate your comments on your appraiser selection process/fees, but my question was: “What would be your estimate as to what percentage of AMC placed orders are sent to appraisers based on something other than their fee?” I was referring to the % industry wide, and I think we both know it is the crushing majority. What % of orders placed (Nationally, by all AMC firms) are utilizing the lowest bidding appraiser in your opinion? Your fees are resonable, but your company is the exception.

    Monopoly = The goal.
    You haven’t figured that out yet? Lender control of the entire appraisal industry is the goal. Small AMC companies will be crushed by the 10 bank and title company owned AMCs in the Country, through design, and assisted by a monster lobby.

    Scheduling an appointment would violate HVCC if value was discussed, I agree. You can get hit by a car walking out of your house too, but you still do it every day. If the broker (who you say does not know any better) tries to put pressure on the appraiser by giving him a value target, he should be reported (to the hot line that does not yet exist). Until the hot line is set up (if it ever is set up), the appraiser should just cancel the order. Brokers who don’t know what they are doing are not the kind of long term client you should be working with anyway.

    As long as there is no SUBSTANTIVE communiciation that would impact the value, the intent of the rules are followed. Again, AMCs don’t want any communication so they/you can keep control of the process and because it works in your favor to take that position. This absolute ban on communication is not helpful to anyone but the AMC and is not what the HVCC intended.

    “It is up to the appraisers to not let anyone influence the value” = Exactly, that is the point of the entire HVCC, but in the end, it is up to the appraiser to resist pressure, just like it has been for decades.

    Keep in mind that the lender OWNS the AMC (all of the top lenders own their own now, usually in partnership with First American/eAppraiseit), so they will not look for another AMC when the service is poor. Without corporate independence there will be no competition for quality, which is why firms like yours will struggle under the current system regardless of quality/service. I also formed an AMC that we were going to launch in Florida in January. We set up everything including software, appraisers with an average of 18 years experience, and a complete operations/logistics system. The costs are minimal and do not justify the 50% the vast majority of AMCs are charging. When the corporate independance clause was removed, we put the AMC company on hold pending a reality check from the government.

    Without corporate independence, disclosure of actual fees on the HUD, and regulation of these companies the system will never work (effectively). The HVCC does not achieve it’s goals, and will only continue to be a disservice to the consumer and profession.

  28. Jennifer:

    The larger AMC’s will wipe out the smaller ones (like yours). It’s happening now, in lending, in escrow services, and title services.

    I hate it, but it’s true.

    Large businesses actually FAVOR increased regulation, since small businesses cannot afford the resources to lobby effectively (that is, to lobby for small regulatory changes with huge benefits to the lobbyer).

    Read this short op-ed pice, and it will become much clearer.


    AJ, I gotta say you are one of the most erudite appraisers I have come across in a long while. I work with some very smart, and ethical local guys, but few will step up and write in a forum like this.

    Thanks for illuminating the issues from the opposite corner of the USA!

    Jennifer, hats off to you as well. Thanks for contributing to the discussion.

  29. Thanks Roger, great word by the way (erudite), had to look that one up.

    The article is interesting. “…the public at large is, entirely rationally, remarkably ill-informed about politics and policy”. That is the truth, and is a big part of the problem.

    This HVCC has been one of the few times I have researched everything I can get my hands on, and it is depressing the way the system works these days.

  30. I’m going to read the article but don’t have time now. Thank you Roger.

    “What would be your estimate as to what percentage of AMC placed orders are sent to appraisers based on something other than their fee?

  31. AJ

    Man, if I could only get paid for vocabulary…

    Regarding Rat Democracy, it was the first time I REALLY understood how and why things work the way they do, in forming policies in a largely democratic government.

    Most people feel content to ascribe the way things work (or don’t work) to good and evil (if it hurts me, or things I like, then it is evil), but I could not accept that evil was so common as the occurence of events and policies that I disliked would seem to indicate.

    Rat Democracy is a much better predictive model.

    Regulation will not solve our problems, since the folks that influence that regulation (by spending enormous amounts of money) will see to it that the regulatory policies favor them, hurt their less well off competitors, while appearing to help John Q. Public.

    Don’t misunderstand…regulation WILL help some of the public, and curb some free market excesses, but it invariably gets tweaked and twisted to benefit those that can profit from paying close attention to the details.

  32. The APPEARANCE of helping is the key to any well run political theft. The fact that this is presented as a solution to industry quality makes me ill. You gotta hand it to them though, brilliant…

  33. Jennifer:

    Why haven’t you complained to your state regualtors about the lender that stiffed you for $160,000 worth of appraisals?

    The case here in WA (I’m too busy to look it up) was only about 7 stiffed appraisals, and it got the lenders licensed pulled.

    And why would you agree to put that many eggs in the same basket?

    Diversification of income and investments is always a good strategy.

  34. Great story out there from Teri Buhl (Google it). I’ll give you a small sample that pertains to bank owned AMCs:

    “The rules that did get implemented, however, allow bank ownership of AMCs to continue. Thus, including full and partial, direct and indirect ownership, four big banks now control over 80 percent of the appraisal market under HVCC. Not only does BofA own Landsafe, but Wells, Citi, and JP Morgan have ownership interests in appraisal subsidiaries/joint ventures of First American and Fidelity/LSI ServiceLink.”

  35. It fries me that the guidelines were amended to allow the bank ownership of AMCs. The foxes are running the chicken coops.

    BTW NAMB wants to hear about issues with AMCs (HVCC).

  36. $16K is a ton of happy meals. I don’t know of any laws in TX where the LO’s can lose their license. I’ll check into it but still going after the money.

    AJ –

    I would say you are right on for the percentage AMC’s hire for lowest fee available.

    I think the AMC’s should be regulated but I also think the huge fees they want to charge them will put most, if not all, of the smaller AMC’s out of business. The smaller AMC’s are the ones who are trying to change the industry and how appraiser are treated/paid.

    My company provides quality reviews by appraisers but we make it very clear they are not appraisal reviews. Any appraisal reviews are paid to appraisers, outside of our company, in the area of the subject. They must be licensed and knowledgeable in the area. Oh, and we don’t pay them $35 for it.

    My company is not owed by any lender which does make it hard to compete. We have many clients who use us because of the knowledge we have in the industry and our service we provide. We can only hope that our wonderful government will stop the banks from owning their own AMC. 🙂

    The $16K owned is from several years ago but I have four years to file. I have learn a ton from it but I just wanted to let other people know that this type of stuff does happen in the real world.

    Ok, I can only speak for my company and the only reason for the lack of communication between the 2 parties is for the HVCC. It is fine if the underwriters want to contact the appraiser after the fact as long as they don’t try to get them to change the value.

    One of the lenders we do work for order 2nd appraisals because of the new FHA declining market factor. To my knowledge, this fee the lender pays for and not the borrower.

    There has been several time where I pull comps in the Dallas/Ft Worth area, for which I am very knowledgable in, to see if the comps appear accurate. Everyone I have check they are. Before the HVCC some of the LO’s would want me to double check. For appraisals outside of our area, we look at comps, pictures, adjustments, comments, etc. Do I know if the appraisal is correct, no but I can tell quality when I see it.

    We do not use anything like zillow. As an appraiser, I have had to fight with these stupid models that pull comps. They make my blood pressure go up.

    I’m bitter too, there is nothing wrong with that.

  37. I went to Blood hound, and wrote an extensive comment. It’s been 24 hrs, and it has not yet cleared moderation.


    Here is what I wrote.


    The tone of your article seemed to imply that you favored the implementation of HVCC, though I understand your reply says you do not.

    “The bank that I work for chose to be proactive and we began implementing the Home Valuation Code of Conduct on mortgage applications taken on or after January 12.

  38. Roger, I think you hit the nail on the head…something about Tom’s article rubbed me wrong and I think it was that it sounded as if this something “good”. HVCC is only good if you own or have interest in an AMC. And it might help a few appraisers who did not have strong relationships with mortgage originators.

    From I know Tom, he seems like a good person and it’s nice to see someone who works at a bank actually blog. (I’m sure most banks frown on having their LO’s blog or have an opinion).

  39. First let me say that I loved your comments Roger…

    Something interesting happened to me this weekend. On Friday I received a request from an AMC. For those of you wondering, yes, I do work for AMCs on a limited basis. This is an AMC that has taken over a bank’s ordering process in the last 2 months and we wrote some files for them to try them out and because their fees were not a complete joke (although mildly funny). I received a request for a “reconsideration of value” on a file that I wrote back in March. The request says:

    “XXXXXX is committed to providing superior customer service to our client. In an effort to provide this customer service, we request that you review the below sales that have been provided to us by the lender and/or borrower.
    If after reviewing the sales you determined that a change in the appraised value is NOT justified, please respond back on an addendum page within the appraisal report with an explanation as to why the additional sales information does not warrant any change. Please resubmit the entire revised report to XXXXXX
    If after reviewing the sales you determined that this additional information supports a change in the appraised value, please revise your report accordingly…”

    Now I don’t really have a problem with this, but my point is that putting the AMC between us did not stop the client from requesting (or depending on your view pressuring) me to change the value.

    I’m not going to use their new “suggested” comps. I reviewed them when I wrote the file, and they support my appraised value anyway. If I was the type of appraiser that would buckle to an unjustified client suggestion, then I’m quite sure I would revise the value upward after essentially being told that the lender needs a higher value. I’m not, I don’t, I would not have last year and I won’t this year, no matter who is asking or just because they asked. The comps do not justify a higher value and they are not comps I “missed”.

    So how is the pressure any less now that the AMC is asking? Am I still concerned that the client will put me on a “do not use list” if this happens with too often? Yes, but that does not change the way I handle the request. The HVCC has nothing to do with that decision. In fact I think that I’m more likely to lose their business now than it was last year and now I also have to worry that the AMC could decide to put me on a list, but I have no proof of that. I’m just one of those people that thinks absolute power corrupts absolutely…

    Switching gears now – I also received a nice postcard this weekend (I’m also a realtor/broker) that says: “Tired of running around town taking your BPO pictures? BPO PICS – I can help you with your BPO pictures in most Palm Beach County!!!! Quick turnaround times excellent rates”

    So now we have non licensed people running around taking photos that are being presented as “original photos” in BPO reports being written by realtors that NEVER WENT TO THE HOUSE AT ALL. For those of you who don’t know, BPOs are being used to set values for work outs, short sales, and foreclosures. If the realtor does not go to the house, what are the odds that they will miss something pertinent to the value but not visible in the photo? So much to be upset about…and so few people that care.

  40. Whenever I’m looking for an email…I try to delete and clean out my massive email in-box…I just came across one where someone was reaching out for help with their existing mortgages…I’m not going to share the entire email–just this small bit;

    My wife and I are still extremely angry we were manipulated so easily into a second mortgage by [big mortgage lender/bank now absorbed by another big bank] via their chosen appraiser. We’re convinced it was no accident this person devalued our home in order to shoehorn us into two mortgages. But what can we do now?

    Do you think that appraisers who worked for bank appraisal departments would actually devalue a home so the borrower would need two mortgages or a more expensive mortgage?

    Maybe the real answer is that consumers should select the appraiser as long as the appraiser is FHA/Fannie/Freddie/VA/etc certified?

  41. Rhonda:

    I agree, Tom seems like a guy that’s trying to put the best face on the situation, but not a bad dude.

    Throughout history there have been good people trying to put a “good face” on things that we now know as evil (Eugenics, racism, slavery, etc). Such is human nature. Someday, something I thought was “OK”, will turn out to be awful. History will judge (or more likely, ignore) my opinions.

    So, I did my utmost not to attack his good intentions, but only his conclusions and complicity/complacency.

    AJ, that is a GREAT example of the “new pressure”. Not so subtle is it?

    I have NEVER ONCE disagreed with an appraisal once it is written. I may have spent 45 minutes trying to understand it, going over it with my appraiser, and then explaining to my borrower the value difference.

    It is clearly wrong to try to coerce a target value from an appraiser, I never once believed any different.

    OK, you all have finally got me to do something radical (at least for me!).

    I just registered http://www.hvccsucks.com. OK, it only cost $11, so I guess it’s not that radical.

    No content yet. I’ll have to figure that one out in my spare time. Anyone want to help?

    Let’s tell em how bad it really is. On a nationwide basis.

  42. That is an interesting way of telling an appraiser you need more value. And the HVCC states that new comps can be presented to an appraiser.

    Maybe all appraisers should go on strike ?? 🙂

    Most people outside of appraisers don’t understand the adjustment section and that most of the time comps given to the appraiser either supports the value already given or supports a lower value.

  43. Jennifer:

    No disrespect to appraisers, but I’m pretty sure they could not organize a pick-up softball game at a picnic before the sun went down, much less, organize to go on strike! They are so used to being independent (and always being right!)

    Powerful business interests saw this, and mowed you down like un-armed civilians.

    Maybe, enough of you will see how you were mistreated, and rise up.

    I hope so. At least, you all could do a co-ordinated national one day sit down strike, and MAYBE make the papers, since barely anyone is reporting the massacre of your professional status, to that of a wage slaves.

    Speaking of interesting, why is it, that the BANK could ask for such a thing, but not the loan originator, or mortgage broker?


  44. My comments are still “in moderation” at Bloodhound.


    That might irk me more, but Tom has tried to unlock them (evidently it’s not in his control), which is more proof that he is a good guy, and may be on the right side of this fight.

    He had this link posted on his site, a petition to revoke HVCC


    Please, go add your name to opposing this horrible regulation.

  45. Pingback: HVCC - Why California Residents Need To Care About The Home Valuation Code of Conduct | FHA Mortgage Blog

  46. I appreciate all of you that have commented on Rhonda’s article. The consumer needs more awareness. Our voices need to be heard. Take a look at my URL and see over 13000 voices so far that have commented on HVCC. We need to stop this in its tracks. Get this petition out to everyone you know.

    Thank you for your help.

  47. Check this out from Appraisal Loft…a law suit has been filed against Wells Fargo:

    Don Pearsall and Timothy Savage both claim Wells Fargo tried to strong-arm each of them into inflating appraisal values, violating the laws and regulations of the Uniform Standards of Professional Appraisal Practice (USPAP). The USPAP rules clearly state an appraiser must not accept an assignment that includes the reporting of predetermined opinions and conclusions – something the lawsuit claims Rels does on a regular basis.

  48. I’m 3/3 on deals with appraisal kinks since May 1 thanks to HVCC. This whole process to protect consumers has raised costs since there’s another middleman and eliminated accountability. I have one deal where the listing agent was contact by the appraiser three days before the appraisal due date and he refused to come out until the day the appraisal was due! Needless to say, it was late, causing us to have to push back all our timelines and there’s no recourse.

    We’ve also see unexperienced appraisers getting appraisals since it’s now issued to the “pool.” I had a coworker get an appraiser from 130 miles away to do a complicated neighborhood! My wife has a listing for sale and the appraiser used comps from across a major highway, away from the water, which is a VERY different community and low balled it too.

    This is a disaster and I can’t wait to see people get behind this issue to get it worked out!

  49. Well I’ve been busy and it looks like you all have been too. Yes, the http://www.hvccpetition.com is the best way to have your voice heard right now, please sign it (unless you like this new system of course).

    Response to 55 – Rhonda – No I do not think that happens. I know it is a common theory in the industry, but this has never happened to me or anyone I know (and I know some appraisers working directly for banks). I will say again that innacurate is innacurate, high or low. They probably just got the wrong idea about his intentions, but the impact on their loan is the same. In my opinion, the innacuracy just stems back to the fee and the type of appraiser you get for less than $200 a file. The easiest comparables and lack of an in depth analysis is bound to result. Of course, you could get a bad appraisal from someone getting paid $350 too, but the odds are much greater with the cheap guys, and boy are they busy…

  50. Cant say:

    I’m assuming you are the author of the comments (anonymous), not the paid PR industry hack that wrote the original article, right?

    Interesting you would choose to go to the king’s court to argue against monarchy.

    Welcome to a friendlier venue.


    Drop me a line on the side, I have an idea…

  51. Cant say, thanks for the link to TAVMA.

    “With the AMC keeping more the half the appraisal fee in most cases, the quality of the appraisal suffers as the inexperienced and less competent appraisers are the only ones who will work for fees that do not allow for ample time to develop a credible appraisal.”

    First of all, on average across the USA, AMCs pay appraisers 60% of the appraisers’ so-called ‘retail’ appraisal fees, retaining the other 40% for transactions costs above and beyond the production cost of the appraisal. It’s 60% to the appraiser, 40% to the AMC. Nationwide average. Mean average. Nationwide.”

    They’re defending taking 40% vs 50% of the appraisers income–what a sad joke. What transaction cost justisfy 40% of the appraisal fee and have these “cost” streamlined are created any value/benefit for the appraiser?

    …it would be interesting to show who the big AMCs are along with which banks/title companies have interest in them. It seems to me this should be disclosed to the consumer.

  52. Check out the Board of Directors of TAVMA:

    President and Chairman
    Executive Committee
    Bill Sussman
    SVP, National Business Development
    Fidelity National Title Group
    493 E. Semoran Blvd.
    Casselberry, FL 32707

    Immediate Past-President (2007)
    Donald H. Blanchard, Esq.
    SVP, Deputy General Counsel
    Lender Processing Services, Inc.
    601 Riverside Avenue
    Jacksonville, FL 32204

    Past-President (2006)
    Executive Committee
    Ben Renko, Sr.
    Data Search, Inc.
    797 Cromwell Park Drive
    Suite B
    Glen Burnie, MD 21061

    Past-President (2003)
    Executive Committee
    Edward J. Krug
    Commercial Loan Services
    200 Cherrington Parkway
    Suite 420
    Moon Township, PA 15108

    Past-President (2002)
    Executive Committee
    Michael Forgas
    President and COO
    National Real Estate Information Services
    100 Beecham Drive
    Pittsburgh, PA 15205

    Executive Committee
    Lee Howlett III
    Division President & COO
    Fiserv Lending Solutions
    31 Inwood Road
    Rocky Hill, CT 06067

    Bill Griffin
    Vice Chairman
    LSI, a Fidelity National Information Services Company
    700 Cherrington Parkway
    Coraopolis, PA 15108

    Kevin Gugenheim
    EVP and Chief Strategic Officer
    ServiceLink, LP
    345 Rouser Road
    Coraopolis, PA 15108

    Robert Hinson
    Vice President
    TransUnion National Title Insurance Company
    2711 Middleburg Drive, Suite 113
    Columbia, SC 29204
    803-799-4747, ext. 13

    Jim O’Donnell
    Equity National Title and Closing Services
    401 Wamponoag Trail
    East Providence, RI 02915

    Jeffrey D. Vaughan
    Executive Vice President
    LandAmerica Financial Group, Inc.
    Gateway One
    101 Gateway Centre Parkway
    Richmond, VA 23235
    jvaughan@landam.comThis email address is being protected from spam bots, you need Javascript enabled to view it This email address is being protected from spam bots, you need Javascript enabled to view it

    William Welge
    Realty Data Corporation
    290 Bilmar Drive
    Pittsburgh, PA 15205

  53. I’m having some internet issues Rhonda. The information is hard to come by and it looks like they are doing a pretty good job of keeping the relationships off the net (and/or almost no one is writing about it).

    Check out this article for First American relationships, they own the biggest AMC in the business and use their massive title services influence to tighten their grip:


    Wachovia did own Greenlink (now that is Wells Fargo though, not sure how that worked out). I know Greenlink cut my company off like a bad habit with no explanation (not hitting targets???) a few years ago.

    Countrywide did own Landsafe, now it’s BOA (I think). They continue to attract lawsuits for collusion and hitting targets.

    PNC owns one, but I can’t find it and again, I’m having some computer issues…

    No big lists on the net though, that is for sure! Once you have the 3-5 biggest lenders in the Country going through one Title company goliath for their AMC parterships, how much more do you really need?

  54. Sorry I’ve been having some internet trouble…

    Quantrix = Chase + eAppraiseit
    RELS = Wells Fargo + eAppraiseit
    Landsafe = Countrywide (now BOA)
    Finiti = Citi + eAppraiseit

    First American has joint ventures with at least 3 of the biggest lenders in the Country and is working on a near monopoly. First American pays some of the lowest fees in the Country through eAppraiseit and these joint ventures.

  55. Check out the First American subsidiaries and you will get an idea of the scope of the control they have on the industry:


    Quote I found – “First American revealed plans to merge 12 companies into larger other First American underwriters this year”

    Another quote I ran across today related to the issues at hand – “According to the complaint, borrowers were forced to use the Countrywide subsidiary, LandSafe who, according to the charge, skimmed off part of the appraisal fee for themselves (Countrywide). The borrower was charged $450 while the appraiser sometimes netted less than $200 with LandSafe/Countrywide pocketing the difference”
    Analysis of TAVMA contributors

    Servicelink = Owned by Fidelity

    LSI = Owned by LPS = Spun off from Fidelity last year and provides title services.

    Data Search = Not sure about their ownship, but I noticed Glen Burnie has a mortgage brokerage in MD.

    Realty Data Corp = Title Company

    Landamerica Financial Group = Bankrupt *purchased by Fidelity? Their “one stop” solution included all services, including title and appraisals.

    Equity National Title = Title Company

    Transunion national title = Title company

    National Real Estate (NREIS) = Title Company (owns their own mortgage company “Allpointe Mortgage” – no conflict – no sir)

    I also found this little tidbit from an interview with FISERV that is similar to the response I received from FHFA regarding the HVCC impact on appraisers “business impact on appraisers should be nil.”
    The quote from FHFA “The code focuses on appraiser independence and does not affect business or structure issues in the lending and appraisal industries”.

    The title company ownership is being intermixed with the lender ownership and joint ventures are showing up all over the place. A serious effort would reveal more crooked ties than the mob. If I can see all of this with my laptop and Google, where in the hell are the regulators?

    TAVMA is the group that got the corporate independence clause removed from the HVCC (I suspect based on their own publications). These guys are the enemy, and they own the industry. The only one missing is First American, but with all of those subsidiaries, maybe I just missed the connection. I have no doubt it is there somewhere.

  56. Well I just had another in depth analysis of each and every TAVMA board member erased due to computer trouble. Let me just say this about the ownership issue. The TAVMA board is full of title companies that have ties to lenders. The ownership of title companies and lenders are intermixed. The original HVCC analysis called for a buffer between the appraiser and the lenders by not allowing title company or lender company ownership of an AMC. The TAVMA document sent during the comment period is indicative of their influence over the final release document (if you read it, be prepared to be revolted and anoyed).

    There are obvious conflicts of interest. You have to spend only a few hours researching the companies listed on the TAVMA site to see the ownership connections to the lending industry. First American is the biggest offender, but given that they have HUNDREDS of subsidiary companies, it is difficult to determine their ties to TAVMA. I’m sure a significant amount of time spent researching their subsidiary companies and board members would reveal the ties. These are the most obvious RICO violations I’ve ever seen. The mob would be jealous of this system. How does RESPA not apply?

  57. AJ

    Thanks for the leg work.

    NOTHING the AMC’s do justifies the bite they take out of the appraisal, unless you count delaying, obfuscating, annoying, hindering, and generally ripping off the borrower.

  58. Pingback: Buyers Get Slapped Around with Terrible New Appraisal Rules and AMCs

  59. I am being forced to use a big banks AMC for a Field Review right now on a refi… the AMC just today asked for a copy of the purchase and sale agreement…. ummm…hello!!! IT’S A REFI!! 🙁

  60. The TAMVA article has been pulled completely. An article written to challenge the integrity of appraisers that testified before Congress.

    It looks like “cant say” had a good enough argument to silence the biggest AMC lobby in the Country. If one person can do that, in his/her spare time at night, it makes me think some other articles should be challenged as well.

  61. I am surprised we have not heard anything in the media about the effect HVCC is having throughout the Real Estate market. We all need to ORGANIZE, PICKET and PROTEST this in Olympia. Lets draw some attention and put the heat on those elected officials. Enough is enough!!

  62. Sandra, I totally agree. Do you want to organize? 😉 What is your role–are you an appraiser, LO or ? I’m surprised it seems like most appraisers have sat back and let someone take away a chunk of their income.

    At RE Bar Camp in Chicago this week, Dale Stinton, CEO of NAR (where the Bar Camp was held) commented that NAR was for and against some of the features of HVCC. He was being grilled by so many in the audiance, he didn’t have a lot of time to elaborate (and wasn’t pressed to). I wondered though…why would NAR be for HVCC?

    • Rhonda,

      My brother has been an Independent Fee Appraiser in Washington State for over eight years. Since HVCC went into effect, the results have been disastrous for his business,(also other appraisers, LO’s, we know) due to loss of most of his client base.

      In light of all the HVCC petitions that have been signed, I wonder if the signatures will ever get on the desk of the official’s in Washington. As for the general public, they are not aware of the current situation until they either try to refinance, sell or buy property. This is why I suggest, to draw public awareness, all concerned parites should organize and picket at the State Capital.

      Recently, an associate of mine, (a small business owner) did just this. As a result her dispute got the attention of local TV & radio stations.

      Why aren’t appraisers not taking similar action ??? Maybe they need to form a coalition or union.

  63. I’m receiving emails from home owners who are have terrible stories about how HVCC is ruining their ability to sell their homes from across the country. If you’re having an issue with HVCC, please contact your elected officials and share your stories. NAMB suggest that you also contact:

    NY Attorney General Andrew Cuomo’s Office: (212) 416-8000,
    Federal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
    Fannie Mae: (800) 732-6643
    Freddie Mac: (703)903-2000,
    Senators, Representatives and Governors
    Also,please contact your local TV and Newspaper outlets.

    NAMB wants to hear your stories too at hvcc@namb.org

  64. I am a certified general appraiser and there is a good way to deal with appraisers that do not know what they are doing. Send the report to the state. I have done this on review appraisals where I thought the value was well off. I work for a number of AMC’s and for me the biggest frustation is getting information from the AMC. On sales getting the contract seems to be the hardest part. About 1/3 of my orders the borrower hasn’t even decided to go forward with the loan. What I hate the most is I found out a borrower couldn’t get a loan because my appraisal came in 5K too low. If I had known they needed $725K instead of $720K I would have said fine as the most comparable Comp was adjusted to $722K and I brought it in at $720 but they needed at least $725K. Had I known I could have easily brought it in for $725K. At least on a sale we get to see the contract and if we are a few thousand off but the purchase price is well with in the value range adjust accordingly and not kill the deal. Every home has a range of value. But we have to come up with a dollar amount.

  65. Bank of America is clarifying their requirements for mortgages they purchase (from brokers and/or correspondent lenders) with regards to HVCC:

    When Sending by First Class Mail:
    Mail the appraisal at least eight business days prior to loan closing.
    When Sending Overnight:
    Overnight the appraisal to the borrower at least five business days prior to the loan closing.
    When Sending by E-mail, fax or hand delivery:
    E-mail the appraisal to the borrower at least four business days prior to the loan closing.
    Saturday, Sunday and legal holidays may not be counted as business days. The file may be documented with borrower acknowledgements, processor certifications, or other evidence that verifies the actions taken.

    Note: with a three day right of recsission (typically on a refi); Saturday counts as one of the days! This has great potential to delay closings of purchases AND refi’s.

  66. We have had some discussions in the past about appraiser communication with the broker and the fact that Fannie Mae/HVCC does not say that the appraiser cannot communicate with the broker. To further prove my point that the AMCs are making this absolute rule against HVCC and Fannie Mae guidelines to feather their own beds and for no other good reason, please see the following quote from an appraisal order I have just received DIRECTLY from Fannie Mae:

    “Contact broker to verify occupancy and confirm access instructions”

    This is the ONLY way that I’m instructed to obtain access to the property. I would love to receive any feedback from an AMC who still claims this is against HVCC and Fannie Mae guidelines! Broker communication with the appraiser is not an issue, as long as they are not applying pressure to influence the value or trying to select the appraiser.

    • I agree, AJ. Contacting the mortgage broker to determine occupancy/access shouldn’t be an issue with HVCC. Unless this information is provided when ordered with the AMC, this is another opportunity for a delay in the transaction. The mortgage originator cannot provide this information to the apprasier because we don’t who the appraiser will be until we receive it.

  67. There’s a decent article in the Seattle Times today. Looks like NAR is FINALLY waking up to the potential train wreck created by HVCC.


    The funniest line in the article?

    “When home values come in below the sales price, that’s not the appraiser’s fault, it’s a reflection of the market, the Appraisal Institute, a professional group that represents more than 25,000 appraisers, said in a statement yesterday”

    The funny part is the claim that Appraisal Institute represents 25,000 appraisers.

    The organization has been completely taken over by the appraisal management companies. It clearly does NOT represent the interests of the independent appraiser.

  68. Pingback: WannaNetwork Real Estate Networking » » Home Valuation Code of Conduct (HVCC) Call To Action

  69. From a press release from NAMB yesterday:

    For Immediate Release Contact: Jon Otto
    June 26, 2009 (703) 342-5851
    NAMB Applauds Introduction of HVCC Legislation
    McLean, VA – June 25, 2009 – Last night, Representatives Childers (D-MS) and Miller (R-CA)
    introduced legislation requesting an 18 month moratorium on the Home Valuation Code of
    Conduct (HVCC). The National Association of Mortgage Brokers (NAMB) applauds the
    introduction of H.R. 3044. NAMB would like to thank Representative Childers (D-TX) and
    Representative Miller (R-CA) for their continued efforts and leadership on this issue.
    “The introduction of this legislation is a victory for consumers and members of the industry

  70. What I do not understand, is while the large banks own the AMC’s, why is it that they still have the appraisal go through internal review, and then feel the need to cut the value, based on their review, but according to HVCC guidelines send the appraisal report to the client? So basically, appraiser gives x value, internal review gives y value which is lower than x, client see x value, but will only be offered loan based on y value? Client is furious bc they feel appraiser is independant 3rd party, how can bank, review and only lend to what they feel is a lower value? Why send the appraiser in the first place, and especially since the same lender owns the AMC, why are they allowing this appraiser to continue to be on their approved list if they feel that the appraiser is inflating the value.
    Only logical reason, is the AMC (owned by Lender) is generating positive income by paying appraiser a lot less than what they are collecting from the borrower for the appraisal.

    HVCC is not protecting the client in any way. It is only further hurting home values, as well as forcing the strong, ethical appraisers out of business.

    Banks should not own AMCs, not an independent 3rd party at that point, and they should certainly not be allowed to come up with an abritrary value without having to send documentation to the borrower along with the appraisal.

    • appraisers wife, I totally agree:

      “HVCC is not protecting the client in any way. It is only further hurting home values, as well as forcing the strong, ethical appraisers out of business.

      Banks should not own AMCs, not an independent 3rd party at that point, and they should certainly not be allowed to come up with an abritrary value without having to send documentation to the borrower along with the appraisal”

      The other benefit to the bank is when the value comes in lower (if the lower value is artificle) as the bank is further protected by the re-adjusted loan amounts (assuming the transaction comes together) OR if the loan amounts are not readjusted per the lower HVCC value, then the bank may be able to charge a higher rate and/or add private mortgage insurance.

    • Thanks for adding the link, SanCan. Some people are just beginning to realize the potential impacts HVCC will have. If you’re a buyer or seller who has been negatively impacted by a bad appraisal, contact your elected officials to let them here your story.

  71. I’m sitting here writing a discounted fee AMC appraisal for a major national lender. There is a long disclosure that the AMC demands be put into the report which says that the AMC (and every other entity on the planet) has not influenced the development or reporting of the appraisal. The irony of course is that adding the mandatory statement (not to mention the 24 hour turn time) is an influence on my report, but I digress…

    I’m looking at the AMC provided contract, which I demand from the lender as opposed to realtor (as per HVCC). The AMC has provided me this contract which is clearly sent from the Realtor and not the lender. Since this is in direct violation of HVCC, I should report this to someone right? The problems are:

    1) I will lose the AMC client for reporting a violation of this type. There are many examples (including TAVMA articles on their blog) of this being considered “difficult to work with” and future assignments will suffer. AMCs do not like appraisers correcting them on their law/rule requirements.

    2) There is no organization to report this to because nothing has been set up to deal with HVCC compliance or complaints, just rules that don’t make sense with no recourse.

    3) NO ONE cares about this but an appraiser, which is why INDEPENDANT appraisers were the watch dogs of the industry. Now we are kittens.

    In another example of this, I received an “updated rule” sheet from one of my AMC clients the other day. They laid out the lender rule updates for their major (top 5) national lender. Included in the list was a notice to get our contract copy from the listing agents. When I called and said this was a violation of HVCC, they put me on hold, and then said the manager agreed. They said “just ask us for the contract when we send you an order” and we will take care of it. I said, well are you going to change the rule sheet? You just sent that to every appraiser on their approved list! They said “we will take care of it”. It’s been 2 weeks, no correction sent, none coming, no one cares…

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  74. Are you an appraiser who is fed up with HVCC? Same here. After building an appraisal company from scratch 17 years ago I tried living with the new rules for 3 months. We lost 98% of our business (banks & mortgage companies). We watched our phones drop from 12 per day to 3 per week. Obviously we closed it down as quickly as possible.

    If you are an appraiser who is sick of sucking it up and doing twice your normal work load just to earn what you did last year try this. Refuse to accept appraisal orders until they eliminate HVCC. Turn your web into a billboard to advise the public on exactly how badly they are getting screwed by the new rules (for a example visit http://www.investsmart.com). Sign the online HVCC petition. Start short selling bank stocks, FNMA stocks, & Freddie Mac stocks. It’s a great way to stick it to the very people who stuck it to you. Oddly enough, we’ve made more money by doing this than we made in the past 17 years of appraising. If only I could find a way to short sell stock in Andrew Cuomo I would be in heaven.

  75. HVCC is a little like a cow with two udders…a cash cow if you will. AMCs feed off of one udder while banks feed off the other. Borrowers and appraisers are forced to feed the cow and shovel it’s [beep] around the clock. Any leftover milk is sent to the cheese manufacturer [Andrew Cuomo] who in turn sells it for political gain. The cash cow had it’s day but it’s time to shove a stick of dynamite up it’s [beep]. AMCs and banks are bloated, appraisers are tired, and the cheeseman needs a new job shoveling [beep] for a change.

    Any appraisers out there that would be willing to join an AMC boycott for 30 days or more? April 1st (1004MC day) or May 1st (HVCC hell day would be a fitting start dates.
    Leave a Comment

  76. I received a notice that the AMC I try to work for has an appraisal order for me. I have approximately 1 minute to accept it or any of the other appraisers that it has been offered to can grab it first. I have no idea if it is a small house in the middle of the city, a huge mansion in the river bottoms, or a rural farmhouse on large acreage. I am being offered $250 to take it and if I don’t say yes right now, I will be out of what little work I can get now that the HVCC is in effect. Of course, if I do take it, I have 72 hours to research, drive to it, inspect and measure it, and put in the time it takes to write a legitimate and accurate appraisal with at least six comparables. I am not aware that the AMC has had this order for over a week. No one is allowed to talk to me. It is definitely possible that the AMC is blaming me for the “slow

  77. To JasPar and Rhonda,

    I am a loan officer in Temecula CA. I do some video marketing and video blogging.

    JasPar – this is the most real life story to date that I’ve read and feel compelled to get out to the masses. I’ve heard and read thousands of others, but for some reason this one just gets me. My vision is to have you read this to me over the phone while I record it. You send me a picture of you or a logo of your business name or you can remain anonymous. I will then place that audio/picture/logo into a video and blast this to the masses. More of the public needs to hear this, not just industry professionals.

    thinkbigworksmall.com has created their HVCC Petition and taken it all the way to Cuomo’s office in New York last month. They delivered 48 boxes of testimonials. That’s great. But…

    We need to hear the individual story. We need others to hear these individual stories to continue to raise awareness. 48 boxes is great, but to the public, 1 on 1 stories like this need to be heard.

    Just my opinion.

    Rhonda if you have the ability to get in touch with JasPar please pass on my vision. JasPar if you are interested in sharing this, please contact me. I am in no way hijacking this thread. I give all the credit to RCG –

    More stories like this need to be shared. HVCC hurts us all especially appraisers.


  78. I will be meeting with Cuomo’s office for the 5th time on January 20th. NAIHP has crafted a proposal to fix HVCC. During our last (2 hour) meeting with them, just prior to Thanksgiving, they admitted HVCC had problems. I’m sure this had something to do with the flood of evidence we presented during the first hour, not to mention a 117K signature petition with horror stories delivered to Cuomo’s office in 35 boxes and the Fox News segment I did 3 hours before the meeting.

    I’ll have an update for you after the meeting.

    • Marc, thanks for visiting RCG. 🙂 Please keep us posted. I would love to interview you for a future post at Rain City Guide if you’re open for that. Maybe when you’re here as a panelist for the Pacific NW Housing Summit?

  79. It has been one year since I wrote my original letter, Happy Anniversary!

    Please tell me if I was wrong about anything:


    The appraiser hotline for reporting of violations has still not been established more than 1 year since it was announced (along with the HVCC). I guess if they wait long enough, there will be no experienced independent appraisers left to report violations since appraisers like JasPar are leaving the industry in droves.

    The truth is that the appraiser hotline discussed in the HVCC has not been established because the flood of calls would be too much to handle due to the ongoing outrage over this joke of a … what should we call it … not a law … this “agreement

  80. I was recently shown an appraisal by a lender who pointed out the following disclaimer within the appraisal report:

    “Although the HUD-1 may indicate that the appraiser was paid $500 he in fact has a 50% chance of being paid $150 by the Appraisal Management Company (1/2 of what he was able to bill prior to May 1, 2009). Please note that the amount of time spent on research for this report has been reduced to correspond with the the appraiser’s fee; therefore, the accuracy of the appraisal has also been compromised. Neither the appraiser or the appraisal company assumes liability for the inaccuracy of the report as we have been asked to provide cost cutter services for a cost cutter fee”.

    Although the appraisal was declined and my client lost $500 I applaud the honesty and integrity of this appraiser.

  81. Andrew’s Cuomode = I know that cost your client, but you have to love the honesty of that appraiser. I have written similar statements in my reports, but then thought better of it and removed them. It sounds like someone was joking around and forgot to delete it. It is interesting that the appraisal made it through the “strict review process” at the AMC with that comment in there though.

    Including the appraiser’s actual fee on the HUD would be a fair and reasonable solution…so I’m sure it won’t happen.


  82. Ahh, what a treasure trove of comments!

    AJ, good to see you back! Yes, everything you predicted did come true.

    Jaspar and AI, thanks for your comments. My heart breaks for you and the local guys that I worked with that sound just like Jaspar.

    At my end (LO, broker and correspondent) it hasn’t been QUITE as disastrous. Our company made a wise choice and created an in-house AMC, priced appraisals fairly, and paid appraisers fairly.

    The biggest problem has been the portability of appraisals…while one lender may release an appraisal for a loan that has died at the hands of the lender (UW, guidelines, implosion, etc.) the next lender refuses to take it, even though the appriasal is certified as being in HVCC compliance.

    A travesty for the consumer, a windfall for AMCs and banks, all engineered by a corrupt and ambitious politician, and his wealthy patrons.


    Step I
    Hire new appraiser licensees to do inspections at $50 per inspection.

    Step II
    Outsource your typing needs to a foreign country for $2 per day.

    Step III
    Always be signing on with new AMCs. Hundreds of new ones appear each month but hundreds of bad ones go under each month as well.

    Step IV
    Sit back and count your megaprofits.

  84. 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

  85. Glennplake you really have the wrong idea. A good appraiser does not base values on the fee, which is a basic hard fast rule as you are aware and your license could be pulled for doing otherwise. You should know that and live by it. Your statements are an insult to honest appraisers like myself within this industry. If you can’t do the job right for the fee being offered, quote a higher fee or turn down the work! If you can’t do that, please get out of the industry…you are killing it.

  86. Hello the fact is that the appraisers did not cause the problems that our market is having. Lets face it it was the mortgage reps, banks, wall street money people and the government that let their “GREED” run wild….Thats true some one once told me that “Human Greed always far exceeds Human NEED” aint that the truth…. Anyway Why do appraisers have to pay part of their fee to support the HVCC/AMC We are losing anywhere from 35% to 50% of what we should be earning on each job… and we do 99 % of the work !!! And the work has gotten more complicated and more time consuming.. This is Nuts!!! Pass this HVCC/AMC cost on to the consumer, the mortgage company or the bank –not the appraiser…We are going to lose lots of good appraisers and those that accept 1/2 fee cant be producing quality reports. Thanks for reading just my two cents.

    • Dennis, I’m sorry…but I encountered an appraiser who did a majority of his biz w/WaMU…made an appt to meet w/me under the guise of being a potential client…started grilling me on who did my appraisals & why would a wait more than 48 hours to receive it… then confessed to actually being an appraiser and saying to me “well if your appraiser ever comes in under-value, you know who to call wink some things are better off not in an email, if you catch my drift”.

      I was disgusted. I know he’s an exception and not the rule, however the fact is, greed impacted appraisers too…no one party was innocent. I wonder what he’s doing now that WaMU is gone.

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