Mike Kennedy
Elite Member
- Joined
- Sep 28, 2003
- Professional Status
- Certified Residential Appraiser
- State
- New York
AI Newsletter Nov. 18, 2009
FHFA: Adoption of HVCC Provisions Means Spirit of Code is Here to Stay
[FONT=Arial, Helvetica, sans-serif]While the Home Valuation Code of Conduct may be unpopular, the major changes it created were already in motion when the HVCC took effect and will continue even when it expires in November 2010. That’s what Federal Housing Finance Agency General Counsel Alfred Pollard told approximately 300 attendees at Valuation Expo 2009, held Nov. 10-11 in New Orleans.
Pollard said the fact that the Federal Housing Administration and other agencies have adopted certain provisions in the agreement between the government-sponsored agencies Fannie Mae and Freddie Mac and New York State Attorney General Andrew Cuomo means regardless of what happens with the HVCC, those guidelines will still be applicable. Pollard said that while the Code is not perfect, “the fundamental issue of appraiser independence … needed to be protected,” and the Code addresses that, he said.
While the proliferation of the use of appraisal management companies is often attributed to the HVCC as an unintended consequence, Pollard said the use of AMCs started taking off in 2007 and continues today. He added that AMCs are now required to comply with the same rules as banks, and that banks are responsible for ensuring that they do not accept reports from AMCs that don’t comply. In addition to the new AMC requirements, Pollard said the only other major change HVCC brought about was that Fannie and Freddie were no longer allowed to accept broker-ordered appraisals. Other than that, he said, there were very few “moving parts.”
The other moving part is the creation of the Independent Valuation Protection Institute , which Pollard said is coming along. One of the main components of the IVPI will be the official complaint form and process for reporting appraiser pressure. In the interim, Pollard said, Fannie and Freddie are getting input on their sample complaint form.
As reported in the October 7 issue of Appraiser News Online, an interim Web site is being created to receive and register complaints from appraisers, individuals and other entities on non-compliance with the HVCC. That interim Web site, to be located at www.ivpicomplaint.org, will be launched later this month. A sample complaint form that will be used for complaint submissions is now available for preview at www.freddiemac.com/singlefamily/pdf/IVPI-HVCC.SampleComplaintForm.pdf. However, the form may not be used to submit complaints until the interim Web site is launched.
But both GSEs, as well as the state appraisal boards, the federal bank regulators and consumer hotlines at major banks, still accept complaints, and Pollard said there should be no hesitation to do so, nor the need to wait for the official form. He added that the IVPI, when launched, is intended to be more than merely a conduit for the complaint form. “The IVPI is intended to look at other marketplace factors, not just collect complaint forms,” he said.
Pollard said in addition to the HVCC and appraiser pressure, the other large factor continuing to plague the industry is fraud. He said there remain issues as to the ability of the state boards to fight fraud due to funding and staffing. As such, he asked if the industry can do more to assist in preventing fraudulent practices. “The degree (to which) the industry can address these issues will give confidence to the people looking at such things,” such as regulators, Pollard said.
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FHFA: Adoption of HVCC Provisions Means Spirit of Code is Here to Stay
[FONT=Arial, Helvetica, sans-serif]While the Home Valuation Code of Conduct may be unpopular, the major changes it created were already in motion when the HVCC took effect and will continue even when it expires in November 2010. That’s what Federal Housing Finance Agency General Counsel Alfred Pollard told approximately 300 attendees at Valuation Expo 2009, held Nov. 10-11 in New Orleans.
Pollard said the fact that the Federal Housing Administration and other agencies have adopted certain provisions in the agreement between the government-sponsored agencies Fannie Mae and Freddie Mac and New York State Attorney General Andrew Cuomo means regardless of what happens with the HVCC, those guidelines will still be applicable. Pollard said that while the Code is not perfect, “the fundamental issue of appraiser independence … needed to be protected,” and the Code addresses that, he said.
While the proliferation of the use of appraisal management companies is often attributed to the HVCC as an unintended consequence, Pollard said the use of AMCs started taking off in 2007 and continues today. He added that AMCs are now required to comply with the same rules as banks, and that banks are responsible for ensuring that they do not accept reports from AMCs that don’t comply. In addition to the new AMC requirements, Pollard said the only other major change HVCC brought about was that Fannie and Freddie were no longer allowed to accept broker-ordered appraisals. Other than that, he said, there were very few “moving parts.”
The other moving part is the creation of the Independent Valuation Protection Institute , which Pollard said is coming along. One of the main components of the IVPI will be the official complaint form and process for reporting appraiser pressure. In the interim, Pollard said, Fannie and Freddie are getting input on their sample complaint form.
As reported in the October 7 issue of Appraiser News Online, an interim Web site is being created to receive and register complaints from appraisers, individuals and other entities on non-compliance with the HVCC. That interim Web site, to be located at www.ivpicomplaint.org, will be launched later this month. A sample complaint form that will be used for complaint submissions is now available for preview at www.freddiemac.com/singlefamily/pdf/IVPI-HVCC.SampleComplaintForm.pdf. However, the form may not be used to submit complaints until the interim Web site is launched.
But both GSEs, as well as the state appraisal boards, the federal bank regulators and consumer hotlines at major banks, still accept complaints, and Pollard said there should be no hesitation to do so, nor the need to wait for the official form. He added that the IVPI, when launched, is intended to be more than merely a conduit for the complaint form. “The IVPI is intended to look at other marketplace factors, not just collect complaint forms,” he said.
Pollard said in addition to the HVCC and appraiser pressure, the other large factor continuing to plague the industry is fraud. He said there remain issues as to the ability of the state boards to fight fraud due to funding and staffing. As such, he asked if the industry can do more to assist in preventing fraudulent practices. “The degree (to which) the industry can address these issues will give confidence to the people looking at such things,” such as regulators, Pollard said.
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