Home Valuation Code of Conduct (HVCC)

Many of my clients have asked questions regarding the Home Valuation Code of Conduct (HVCC). The HVCC was designed to stop inaccurate appraisals. Fannie Mae and Freddie Mac, the creators of the HVCC, were concerned that industry professionals had some control over the appraisal values due to their relationships with the appraisals. The HVCC is designed to eliminate the contact between such professionals and home appraisers. Below is some information from the National Association of Reatlors explaining the HVCC. As always, please contact me with any questions.

"The Home Valuation Code of Conduct (HVCC) establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. It is effective May 1, 2009, for any mortgage that will be sold to Fannie Mae or Freddie Mac; Federal Housing Administration (FHA) and Federal Home Loan Bank (FHLB) mortgages are not covered in the agreement. Breaking News: NAR Meets with NY Attorney General's Office and FHFA to Discuss HVCC.

How HVCC Affects the Appraisal Process
REALTORS® and mortgage brokers are prohibited from selecting appraisers. Lenders may use “in house” staff appraisers to conduct appraisals. However, the loan production staff is prohibited from:
- selecting, retaining, recommending, or influencing the selection of an appraiser; and,
- conducting any substantive conversation with an appraiser or appraisal management company regarding the appraisal assignment.

For the consumer, the appraisal process has remained largely intact. However, consumers may find the process takes longer than and may be more costly than it has been in the past."