This could be good news for home buyers and people wanting to refinance. The HVCC added between $50 and $100 to the cost of an appraisal with no special added benefit to the consumer. Appraisals were not completed more quickly as a new form was added. Often the appraiser was from out of the area and not familiar with the local market. Another onerous fact is that the small independent appraiser was essentially out of business as appraisals had to be contracted for through appraisal companies.
House Committee Weighs Scrapping HVCCThe appraisal system imposed by Fannie Mae and Freddie Mac last May is under attack by the House Financial Services Committee and could be on its way out.The “Home Valuation Code of Conduct” could be terminated by the proposed Consumer Financial Protection Agency under a bipartisan amendment approved by the House committee.The amendment would require the new agency’s director to replace the code with a set of rules developed through regular administrative procedures and public comment periods used by all federal agencies. The valuation code was the product of a settlement among New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac, and the Federal Housing Finance Agency.Critics say the code created more problems than it solved and has encouraged lenders to use inexperienced appraisers who don’t know the areas where they are doing the work, which is resulting in lowball valuations as well as higher fees.The legislation under which this code would be scrapped is likely to pass the full House, but may have a tough road in the Senate.Source: The Washington Post Writers Group, Kenneth Harney (10/30/2009)
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