HVCC ...

Created by:

Norm Ottley, Licensed Real Estate Broker, Valley Center, CA

Date: June 30, Number of Replies: 4

I am a Mortgage Broker and the HVCC is a nightmare. Peter must not have real life experiences to accurately judge the HVCC system.

I was forced to use the new appraisal system by Wells Fargo, who started the process in January to get a head start on compliance. I sent in a simple rate and term refinance loan with checking the value first. I thought I would send a sure thing first to test the new system out. The AMC screwed it up royally. Not only did they go in with a preconceived value, they adjusted everything down to meet that value. It was one of the worst appraisals I have seen. They compared a 2000 ft2 home to a 1300 ft2 and would not use a comp directly behind the subject because it was in a "different area" ... and it's value was too high for their preconceived value. I complained, but they just used the same idiots for the review. I had to have a new appraisal done and went to another lender. The trial HVCC system was so bad that Wells dropped most of the requirements by mid February (less than 6 weeks after enforcing it) because they were loosing so many loans. The same thing is happening now with all the lenders

AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.

It is impossible to lock a loan because of all the additional requirements of signing off on the appraisal to be sure the lock time will be meet, unless you go for a longer lock at a higher cost to the borrower.

The system is totally flawed and should be replaced with an approved appraiser list lenders and brokers can choose from. The only appraisers left are the honest and hard working ones. The rest went to work for the AMCs. These management companies are destroying the real estate market and are incompetent at best.

Norm Ottley
Reliable Lenders/Oak Realty
DRE License # 01216191
Phone (800) 400-5130
Local (760) 749-3978
Fax (760) 479-5925 **** NEW FAX NUMBER ****

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Sarah & john Rummage Licensed Real Estate Broker, Nashville, TN

Date: June 30

My opinion is that buyers are the best judge of value. There is so much inventory, and we always end up looking at lots of houses before the buyer decides on one, that they are educated on value as we look. Buyers are no dummies.

Nobody wants to overpay for a home. Everybody is watching budgets and they want a good buy and they are not going to pay more than they have to. When they walk into a home in livable condition (with no falling ceilings, ripped out dishwashers, dead birds in the house, etc.) at a reasonable price, they almost immediately know it.

What a ready, willing, and able buyer is willing to pay for a property is what it is worth today (an old, worn out saying, but true). If the appraiser is not taking into consideration the sales price, they should be.

Sarah Rummage, CRS, e-PRO

American Realty Resources LLC
Nashville TN 37205
www.Nashville-Homebuyer.com
mailto:Sarah@Nashville-Homebuyer.com

Search Nashville Listings:
http://idxpro.cisdata.net/AR257495/index.html

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Neal Adler, gri,abr, e-Pro Licensed Real Estate Agent, Studio City, CA

Date: June 30

Norm well put. Due respect to Peter, I appreciate his idealism. Nonetheless, this system is terrible.

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Joe Platain, Boothwyn, PA

Date: July 1

HVCC allows and USPAP mandates that the appraiser review the sales contract, so the appraiser does know the sales price. HOWEVER on refinances the appraiser does not know the "estimated" value.

I see nothing wrong with that, because we know that in the day- the "estimated Value" was given from the loan officer to his appraiser- just like the old "stated Income" came from the originator to make the loan work!!

Everyone needs to be honest and say the don't like HVCC because it is killing some of there deals- and i say perhaps those deals need to be killed because we had inflated values before. When will the mortgage industry learn??.. .

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Peter Miller Writing/Editing

Date: July 1

Hi --

Neal writes and says he appreciate my idealism, nonetheless, the HVCC system is terrible.

This is not a matter of idealism, though I assume that's a compliment. The very core of a real estate transaction involves the issue of values. Does anyone doubt that some portion of the real estate meltdown was related to appraisals which were not fully independent? Think of builders with lending subsidiaries, think of lenders who pressured appraisers.

A fiduciary obligation is also not a matter of idealism. If a closing is delayed or inconvenient as a result of a broker's fiduciary obligation to a client, then it will be delayed or inconvenient. That's a better outcome then being sued because a buyer plainly overpaid for a property.

I'm not suggesting that the HVCC is perfect in every way -- but then the old system was decidedly imperfect. Rather than suspending the HVCC for 18 months -- and then perhaps 18 months more and 18 months more -- the better alternative is to fix the system but to make sure that builders and brokers do not have lending subsidiaries and that lenders cannot pressure appraisers.�

We may be getting this anyway as a by-product of this week's Supreme Court decision concerning Cuomo versus Clearing House Association. Now states will finally have a real impact on the origination process. Some industry players have also begun to move in a better direction. See:

http://www.ourbroker.com/?p=3150

All the best,

Peter G. Miller

OurBroker.com

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