The Home Valuation Code of Conduct is dragging down U.S. home values, according to mortgage brokers. But appraisal executives have a different perspective.
The National Association of Mortgage Brokers warned this week about the negative impact from the implementation of the HVCC.
The McLean, Va.-based group said it has received thousands of complaints from mortgage brokers, appraisers, Realtors and consumers about negative HVCC experiences.
The complaints were the result of an NAMB e-mail campaign to generate feedback on the code.
The brokers claim that HVCC has led to the use of out-of-area appraisers who are unfamiliar with the neighborhood. The lack of experience in local markets is resulting in reduced valuations.
AIMSdashboard LLC President Chris Williams says it is not HVCC, but “poor quality appraisal reports generated by discounted appraisal fees and inexperienced or out-of-market appraisers” that are responsible for inaccurate values. The AIMSdashboard service competes with appraisal management companies to help originators maintain HVCC compliance.
Slow turnaround under the code is delaying closings, while costs are being increased and competition is being eliminated, NAMB said. In addition, the transfer of loan packages between lenders is being “severely hampered.”
NAMB cited news reports about how HVCC is impairing the market.
But some in the appraisal industry dispute NAMB’s claims.
“In short I totally disagree with their findings; there is not near enough evidence to support that claim,” Appraisal Analytics Partner Brodie Wolgamott said in a statement today to MortgageDaily.com. The Fort Worth, Texas, firm is a MortgageDaily.com advertiser.
“Too many other factors are at work here,” Wolgamott added.
Steve Haslam, chief executive officer of StreetLinks National Appraisal Services, says his appraisal management firm ensures that its appraisers are knowledgeable about the neighborhoods where they appraise.
“Appraiser proximity to subject, quality and service history are the basis of our appraiser selection on every assignment,” Haslam told MortgageDaily.com in a statement today. “A credible AMC will have statistics on this and ensure that any appraiser is selected is in close proximity to the subject and has solid geographic competence.”
However, AIMSdashboard’s Williams sees AMCs differently.
“Out-of-area appraisers are being dispatched by AMCs who either lack the ability to determine ‘local market ‘ appraisers, or by those lacking appraiser participation in that local market,” Williams explained. “And appraisers who accept AMC issued work are concerned that they will be dropped off of the AMC’s list if they decline too many appraisal requests — even if they decline based on legitimate reasoning.”
NAMB vowed to press on for a repeal of the code.
“Problems caused by the HVCC are slowing the housing recovery and affecting homeowners not even involved in a housing transaction,” NAMB President Jim Pair said in the statement. “The HVCC, which was not voted on by Congress or issued by a federal regulatory agency, is seriously impacting mortgages nationwide.”
