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HVCC: How It May Negatively Affect and Change Real Estate as We Know It

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Wednesday is the deadline for submitting feedback regarding HVCC or the Home Valuation Code of Conduct. The HVCC, in its current form, contains select language that hurts brokers, agents, appraisers, and consumers.

The underlying story is how well this story has flown under the radar. A handful of appraisers, agents, and mortgage brokers I have spoken with were either unaware or vaguely aware of the HVCC and its implications. Unlike legislation moving through the Senate and House, the HVCC has received very limited coverage. While we are acutely aware that with less then 36 hours until the feedback deadline meaning a petition may be a bit late, we are also aware that you miss every shot you don’t take, that is why we ask you to join us in signing the Petition to Reconsider HVCC.


After an investigation by New York Attorney General, Andrew Cuomo into Fannie Mae and Freddie Mac Appraisal practices, the agencies (with the Office of Federal Housing Enterprise Oversight (OFHEO)) agreed adopt new changes to how appraisals are processed in the mortgage industry in exchange for an end to the investigation. The centerpiece of the agreement is the HVCC, which contains many positive and common sense initiatives to help clean up the industry, but also contains significant negative changes to the how brokers and agents are able to work with appraisers and how appraisers are able to operate, hurting consumers, mortgage brokers, agents, and appraisers.

What it means for Brokers:

1. Brokers (or anybody compensated on a commission basis upon the successful completion of a loan) may not choose appraisers to be used for loans they originate and may not engage in any communication with appraisers. Choosing appraisers and all communication with appraisers is delegated to lenders. This means that brokers are not only not allowed to choose appraisers based on quality of work and professionalism, but ultimately lose control of an integral part of the loan origination process, possibly increasing loan funding times and increasing costs to the consumers in the form of longer rate locks and the need to order new appraisals if there is a change of lender.

2. Since appraisals are made in the lender’s name and not the broker’s, if the broker chooses a new lender for the deal, a completely new appraisal will need to be ordered. This increased consumer costs and the time involved in the transaction.

3. All relationships with appraisers are rendered meaningless overnight.

4. Brokers lose control over transactions and are put at disadvantage as power is shifted toward and biased towards large institutions.

What it means to Appraisers:

1. Must use AMC’s (appraisal management companies), meaning independent appraisers are forced to join and AMC and give 40% or more of their income to the AMC. You read that correctly, this will deprive independent appraisers of nearly 50% of their income in most cases (this could likely mean many experienced appraisers will leave the industry altogether). AMC’s are not regulated, by the way.

2. Unfairly targets appraisers, does not affect AVM’s (Automated Valuation Models) and BPO’s (Broker Price Opinions). This not only hurts appraisers as Lenders may prefer unregulated and unrestricted alternatives that are not included in the HVCC and in a manner which is in contrast with the stated purpose of HVCC.

3. Disallows appraisers from engaging in ANY communication with mortgage brokers, loan officers, agents, or others that may receive a commission upon funding of a deal. This means appraisers are not allowed to talk to their clients, a restriction no placed on any other industry to date. This means all the client relationships they have built are rendered meaningless overnight, an unprecedented act against any industry segment to date.

What it means to Consumers:

1. Higher Costs: If there is a need to change lenders or brokers as a new appraisal will be necessary.

2. Increased time to fund loans as brokers lose control of choosing and managing appraisals and may necessitate longer rate locks or extensions of existing locks. In the case that a new lender or broker is chosen, a new appraisal will be necessitated, increasing time to funding.

3. Decrease incentive to change lenders or brokers if they are not getting the service they deserve due to increased costs and time involved.

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Related Information:
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  2. Countrywide CEO Mozilo Calls Homeowner Disgusting? Not so fast.
  3. HVCC Update From a la mode
  4. Make Certain You Have Permits For Your Home Improvement Project
  5. NAR Assessment Cuomo / GSE Settlement

Trace Richardson has written 638 articles on

I'm Trace Richardson and am the founder of LeadPress. I’m a licensed California Real Estate broker and a former equities trader previously holding the Series 7, 63, 55 and 24 securities licenses.

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80 Responses to “HVCC: How It May Negatively Affect and Change Real Estate as We Know It”

  • I haven’t heard much either……this is REALLY bad for appraisers….wonder why they haven’t been more vocal….

  • As is the trend for the last 20 years, appraisers which are among the most regulated group in the overall loan process are again at the bottom of the food chain. What about licencing and regulation of all entities of the loan process.
    Make loan officers, underwrites and the rest spend +/-$500 per year and another +/- $500 for classes on USPAP and ethics every few years. If they have something to loose, like a licence to make a living, then maybe they would be have some incentive to do the right thing instead of “make the deal work to get paid” Hello? Is anybody in there?

  • I think there are only a couple of states, if that, that don’t require loan officers to obtain licenses…the issue has been in enforcing infractions….. even fraud cases involving high dollar amounts that are brought before the FBI are routinely not investigated or delayed for years…. we’ll see if any of that changes… the future…. I can’t say I’m confident it will…..

    The bottom line right now is preventing the death of the independent appraiser… my eyes…. and preventing consumers from having to purchase a new appraisal just because they would like to work with a different lender or broker… that simply doesn’t make any sense…..and shows the haste with which some parts of the HVCC were written…..

  • I have been a licensed or certified real estate appraiser since 1993 and I have seen the pressure put on appraisers to hit that magic number in order to make the deal work. I refuse to work with mortgage borkers or loan officers that want me to do a comp check or pencil seach to see if a value is necessary. Who do those people think they are, asking us to give up our time for free to see if we can hit that number. I think that the HVCC is a very good thing.

  • @RSW: Fair enough, I assume you are already a member of an AMC? If not, that is a requirement so be prepared to give up 40% or more of your income….that isn’t a problem for you is it?

  • With the HVCC, other regulations, rising fuel cost and a very slow market after 17 years I an looking for a job.

  • So what was the outcome of the Wednesday deadline?….what are the next steps?

  • @Todd: You make an important clarification in regards to 50% affecting independent owners vs individual appraisers….

    @Brad: Currently if a borrower has an appraisal from another lender, I can use it by getting it rewritten into our name for small fee…. I don’t think “rewrite” is the correct terminology and every time I use this verbage a friendly appraiser points this out to me, but in any case the net effect is the same, the borrower can use their old appraisal or “rewrite” it for a fee that is much smaller then what a new appraisal would cost…

  • Overall, I agree with this article. This HVCC is a disaster in the making. That being said, I have to say; as an appraiser of 11 years, that every item listed in the HVCC I. has been done to me in my 11 years. The appraisal business is one where doing the job right, with ethics and morality does cost you business. As far as the fee situation, the only appraisers who will lose income are the shop owners. Those of us who primarily work for appraisal companies (most appraisers) already currently work for 50% of the fee (typically). What’s the difference between me having 10 – 15 AMC clients who give me my 50% vs working for 1 local company that gives me 50%? Answer: No difference. In many ways it is better because the work you get is based on prior service, turn times, customer service instead of who brings in the biggest box of pastries to the local dewey, cheatham and howe brokerage. I believe that the biggest problem here is that the already weakended economy will take a huge hit due to the impact of this. Of course one possitive note here is that it will likely be blammed on a democrat president and congress.

  • As clarification: The way the rules are now, every appraisal is done for a specific user, usually a Lender, and although, FNMA/FDMC, will accept the appraisal from a Lender, other than the original user, all Lenders I know of, WILL NOT. Meaning, if the Borrower decides to change Lenders, technically, they need to get a NEW appraisal. So, the HVCC doesn’t affect this part of the appraisal process, it is already like you stated in the article above, #1 for Consumers. The appraisal is owned by the Lender/Client, not the Borrower. I believe this was a FIRREA or RESPA regulation.

    Anyway, the HVCC does appear to irreparably damage the Appraisal Lender business and render our broker business relationships meaningless. It does seem to put alot of power into the hands of unregulated AMC’s and adds to the increasing pressure and declining quality of this profession (not the appraisers, but the profession, in general).

  • @Todd: makes perfect sense and I believe most brokers don’t……. some things will never change. :)

  • Trace

    You are right about the terms “retype.” To an appraiser this is a new assignment. That means new work file and new report. The fact that the prior appraisal might have been done less than a week ago or reasonably recent time frame allows the appraiser to make a business decision: do I need to re-inspect the property, are the terms of the new assignment different and has anything occurred in the subjects market or to the subject that is relevant. This leads me down the path of what to charge and what I will need to do. I know that lenders call this a retype. I don’t correct their verbage as most brokers don’t know what they are actually asking me to do anyway. Sorry, but it’s true.

  • I agree that this is a wise choice. I am a National Real Estate Franchise owner in a small market. There are appraisers in our area that have personal issues with either agents or myself, we all feel that their opinions should be un-bias, it is ovious they are not. My other “beef” is the appraiser receiving a copy of the sales contract prior to his professional opinion. For what reason is this neccessary? If they need legal descriptions it is readly avaliable via internet GIS.

  • Jamie

    Real estate appraisers are REQUIRED to review the sales contract. We are supposed to receive a copy from the lender when the order is initiated. Fannie mae, Freddie mac and the government loans all require the appraiser to review the contract for any terms and conditions that might have an impact on the value. In fact, the URAR (Uniform Residential Appraisal Report)form (designed by Fannie mae) has a specific section for this review. For example: A house sells for $150,000. A week before the closing the borrower switches to an FHA program and the seller now has to pay $5,000 in closing costs. Typically, most real estate agents and sellers will increase the sales price to $155,000 to cover the new cost to the seller. Of course, that is not an issue when all parties agree. The appraiser IS required to disclose this information and account for it. Basically, if the home was worth $155,000, the closing cost would be a mute point. However if the comps indicated that the home was worth only $150,000. Then you would have an issue, since the $5,000 extra from the original agreement is just fluff. By the way, the HVCC will make your problem worse. It will be like a giant VA appraiser roster. You will have absolutely no say whatsoever on what happens. There wont be any “new” appraisals that “make value” or appraiser shopping permitted. Be careful what you wish for!

  • Tom Sliwowski, SRA


  • I just started reading this post and the one by Todd Hurst just sent me through the roof. No difference for him because he chouses not to develop relationships, and the service that has kept my clients loyal for 20 years. A few appraisers work for me, not because they are not good appraisers but because their is a difference between an appraiser and a appraisal company.

    The company is just that, a business, who in this instance completes appraisals. Just because Todd Hurst dose not have the entrepreneurial sprit and would rather work for a AMC and thinks their is no difference for those of us who put in way more hours then just completing reports.

    I have been working for a full fee for 20 years, and believe me, 50% of it is well earned. Todd, you right now today have the opportunity to earn a little better then you have been. Next year if they do not make some change’s you won’t. Opportunity will be prevented from knocking, If your young, don’t be like Todd and waste 11 years of your life working for others without the choice of true independence. Find a new profession. It’s been said many times, you will never get rich working for someone else.

  • Hi, great article and a great point of view from the people believed to be lesser affected by the HVCC, the appraiser. Please contact and please signup with us as a vendor management firm. In truth, we are now marking up fees and not paying appraisers less. Most of the time, our appraisers are paid at the door by the borrowers, and it ranges from $275-$325.00 for a basic FNMA 1004.

    Thanks so much!!!

    Jason C. Sheppard
    President and CEO
    TruClose Financial Services, LLC
    300 Mt. Lebanon Blvd. Suite 2215
    Pittsburgh, PA 15234
    TF: 888.510.9665 x 66
    FX: 888.510.9665

  • Shoot, that was supposed to say “NOT marking up fees” now “NOW”. Sorry! Thanks!

  • @ M. R. K.,

    Sorry that you FEEL so bad about this. Maybe you should look into becoming an AMC, or maybe you didn’t think of that. As far as my spirit is concerned, it’s quite well thanks.

    Todd Hurst

  • This is a travestry and another control that is unnesessary & unwarranteed, what’s new!!!!!

  • All of the above comments are very relevant. However, as is always the case in our nonDemocracy, congress won’t consider any of the complaints by the less powerful. Predictions that I will make here that will be overlooked– Many of the AMC’s are owned by the companies that generate the loans. They were created to form a profitable income stream, most notably, Wells Fargo with its RELS division. HVCC needs to force that conflict of interest to END. Secondly, USPAP does REQUIRE that the fee paid to the appraiser be published on the appraisal. AMC’s have contracts that demand the appraiser not foreclose that amount, directly in violation of USPAP. This would anger the borrower and allow the lenders to know how badly they’re being gouged. Thirdly, many good appraisers including myself have been punished financially in the past by being shut out of lender’s lists. The big banks virtually control who gets the work. This would fall into the hands of the AMC’s who would just transfer the current list from their client into their database. The good old boy network would still be in place. I believe that the new appraisers who have entered the market during the past 4 years will take over the market and do $180 appraisals gladly, to avoid going back to the $12 an hour service jobs they were desperate to leave. Lastly, the real estate market has gotten really sick since 2002, with Realtors and lenders raving how great it was that typical prices went to $500,000. NO, it wasn’t good for the country, it’s inflationary and it destroys the economy and the standard of living. This is insidious. Average mortage payments in expensive markets went to $4,000, $5,000, and even $6,000. I don’t know many families that can survive on even a $2,500 payment. The financial system was used as a speculation tool, and now it’s become a disaster of scary proportions. Bad on us. Admit it, HVCC would have prevented it, a lot of deals would have failed 2002-2006, and prices of homes would have stayed in line with value in use (rents). No one will discuss these issues when making the decisions, the 900 pound gorilla (FNMA) will win again. I out of business next year most likely. (17 yrs experience).


  • Senators want hud statements to reflect what the appraiser is paid & what the AMC steals from Appraisers. If you realy want to have independant appraisers then you can’t have AMC taking 50% of their fees. If AMC after being paid by lenders can rotate appraisal orders to the next appraiser based on experiance, turnaround time, quality of work (that is judge by an independent professional appraisal reviewer) and not by fees charged. Then AMC could protect appraisers independance from realtor, mortgage broker and lender pressures to come up with any particular value that is not supported in the market.

    When congress passes the HVCC or Home Valuation Code of Conduct, the industry will after all the appraiser training of the past years go a long way to protect consumers from lenders real estate fraud and misrepresentations. You have to protect appraisers from being placed by lenders on “silent blacklists” or do not use lists without any due process of law to defend themselves from mad lenders and mortgage brokers false and sometimes fraudulent allegations. Remember Appraisers only report market conditions, they do not kill their deals.

  • If the OCC believes that AMCs are necessary to assist in appraiser independence from lender pressure, financially biased parties, etc. then fine. But I’ll never understand why these AMCs are able to charge such excessive fees and more importantly, why these fees are being paid by the appraiser, whose fees are already lower than reasonable, based upon the rising costs and continually increasing requirements. These AMCs have put such emphasis on low appraisal fees in order to inflate their profit margin that cheap appraisals, rather than well researched and documented appraisals, have become the goal. These “cheap” appraisals have contributed greatly to the current condition of the real estate and mortgage industry. At present, it is my strong opinion that AMCs have done much more harm than good. Consequently, the HVCC, as currently written, will be detrimental as it gives complete control to these AMCs over the entire residential appraisal industry.

  • If HVCC passes in it’s current format it will put the majority of appraisers out of business. Do the math; AMC fees will help you to cover your overhead & gas (if you work out of your home). There’s no money left in the fee to compensate you for your time and training.

    Who among you are brave enough to join in a class action lawsuit if HVCC puts your out of business?

  • From what I have heard through many state mortgage broker and banker associations, this ruling will not pass. As far as appraisers getting paid their asking price and what they deserve, please check out our site at We do not mark up our appraisal fees, all we do is manage and place a quality appraiser with our lending clients’ borrowers. We pay $275.00-$325.00 per appraisal to the appraisers completing our reports.

    We would love to work with you all!


    Jason C. Sheppard
    President and CEO
    TruClose Financial Services, LLC
    TF: 888.510.9665 x 66

  • Hi David,
    I like your idea. I was wondering when someone would mention a class action lawsuit. To systematically take an entire group of professionals, and cut their earnings by 40% and/or put them out of business, deserves some type of action!

  • I am all over this Class Action Lawsuit!!! Sign me up.

  • I’m all over this class action!

  • Re: Below comment by Todd Hurst

    “As far as the fee situation, the only appraisers who will lose income are the shop owners. Those of us who primarily work for appraisal companies (most appraisers) already currently work for 50% of the fee (typically). What’s the difference between me having 10 – 15 AMC clients who give me my 50% vs working for 1 local company that gives me 50%? Answer: No difference”.

    Todd; your remark noted above is a clear illustration what we have trying to tell Congressmen and women since March of this year. HVCC will destroy the appraisal profession for this very reason. No appraisal shops can survive and anyone with over two years experience will change professions because it simply won’t be worth their time to keep appraising. Newby’s (those with two years or less experience) will continue to appraise for the $75 to $150 fees that AMCs are willing to pay because that’s what they are accustomed to earning. Once they figure out EVERY EXPENSE in addtion to fuel comes out of their $75 to $150 fee they will see that it’s not even worth their time. Trust me…by the time you deduct the expenses from half price fees you’ll see that you can earn more at Walmart or McDonalds.

    Best of luck to those of you who remain in the business.

  • AMCs were fine as on the side “filler work”…but the simple fact is apprasing is a high overhead business (even if you work out of your home). The money that they take off the top…is not only the profit…but most of the money you should be paid for your time.

    Chumps work for AMCs…intelligent appraisers have already found an alternate income source and are looking forward to a better life. January 1, 2009 will change your life if you haven’t modified your business plan. I can assure you that the worst of times (for appraisers) lies in the not so distant future…not within the past 13 months.

  • Yes, the HVCC is completely flawed and will significantly impact the appraisal industry. Yes, something does need to be done to address the objectivity problem which got us into this disaster in the first place. The answer is not to mandate an additional layer in between the lender and the appraiser which does not add any value to the product, and actually diminishes the quality and credibility of the entire appraisal profession.

    David is correct. If all appraisals are required to be ordered through a low-balling AMC who skims off 40% or more of the market price appraisal fee up front, the only appraisers left in business will be uneducated rookies who do not have the means or skills to go out and make a better living. You will be left with the bottom of the barrel appraisers.

    The entire real estate industry needs to have our standards significantly raised. Appraisers of any level should be required to have a bachelors degree to become licensed. Due to the cumulative value of the assets we value within a given year, this does not seem unreasonable. A crappy appraiser (skippy) can do quite a bit of damage in one year. Entry level supervisors or managers in “regular jobs” who deal with much smaller budgets and/or assets are usually required to have a bachelors degree.

    There needs to be significant barriers to entry on the loan origination/loan officer/brokering side of the equation. These are the guys who get away with murder and have no consequences. Maybe the broker whose license is on the wall can be punished, but the semi-literate high school dropout “loan officer” who prospected the borrower and falsified their loan application and pressured the appraiser has nothing to lose. Many brokers will turn a blind eye on unscrupulous loan officers working under them, as long as they are closing deals. The broker can claim plausible deniability and blame it on the unlicensed loan officer when caught. Any independent individual involved in any way in brokering a loan (not processors of course) should be required to have a bachelors degree in order to obtain a brokers license. Only licensed individuals should be allowed to be involved in these transactions, and they should be liable for any material errors or omissions, fraud, deceit, etc, just like appraisers. Make fraud very painful for these people. Get rid of unlicensed “loan officers”. These are nothing but sleazy used car salesmen. The industry does not need a whole bunch of brokers/loan officers. This segment needs to be whittled down to just educated, ethical professionals. Thankfully, many of the idiots in this segment have already been eliminated due to market forces. However, I still get calls from brokers/loan officers who “shop around” for appraisers willing to do their dirty work. Its amazing.

    I have mixed feelings about brokers being able to order appraisals. Overall, I would have to say that my dealings with independent brokers have been negative. Even some of my better broker clients have asked me to do questionable things at times. I have many horror stories, and have turned in several brokers to the DRE. However, I dont believe that it should be illegal for a broker to hire an appraiser. There is still a need for this in some cases. However, my best experiences by far in this business is when the bank or the end user is the one who requests my services. Unfortunately, banks only seem to engage appraisers directly on commercial assignments, not residential. This should change. Banks should do this for residential as well. Its their money being lent, they should be the one selecting the appraiser. Banks seem to manage appraiser panels on the commercial side just fine. They should be able to translate this to residential as well. Banks dont need AMCs. Im sure it is more efficient for them, but they should realize that as AMCs become the norm for residential work, the quality and credibility of the appraisals will decrease. This could be much more costly to the bank than developing their own independent fee panels and paying qualified appraisers the entire appraisal fee (which the bank is paying anyway, but the appraiser only sees a portion of it.)

    I am a professional appraiser, not a skippy. I have a bachelors and MBA degree. I didnt spend 7 years in college to get paid $185 to drive 50 miles each way, then spend an additional 3-6 hours writing a quality, credible appraisal. This is barely high school graduate level wages (after expenses are taken out), not professional level wages. Get a clue. If an AMC is willing to pay me what I’m worth, I will certainly work for them. If not, go get skippy and wreck the industry entirely. In the meantime I will be doing private work, commercial work, traditional broker work (for legitimate brokers), etc. Once the industry is completely wrecked, I will probably go back into corporate life again.

  • @ David – The sad reality is, most lenders are already following the HVCC. Every client that I/we had at our office; before it closed, went to a rotation or AMC in the late summer. They made the changes before the “rules” went into effect. That means, fast turn times, quality work, business relationships that we have, now mean nothing. The highest levels of these companies mandated the “change.” The net effect to our office was that we got all the rushes and difficult jobs because our clients knew we could do them. As a result, our office was forced to shut its doors. As for me, I have been selling bank owned real estate since October and took over the BPO department at the shop where I work. My advice to all here is, get your sales license and get in with the local agents who do the bank owned property sales. The other agents will love your appraisal training, the buyers you deal with will love your ability to inform them on the market and you’ll be able to stay in real estate and build a network of buyers, sellers, agents, bank contacts and others for when this market comes back into balance. You might not come out on the other side as a full time appraiser, but you’ll have more skills, more contacts and greater ability to serve the public. It’s funny, the buyers that I work with actually like my sense of urgency, my attention to detail and my ability to listen to them. (all traits of a good appraiser) Good luck to all. Todd Hurst

  • I have, in scrambling for work, found myself in three management companies. Two pay very well. I cannot say the same for the third. It is insulting, as I am writing the report to think how little my opinon means to this company. They pay so little, $160 for a 1004, and want it yesterday. They have employees call that have no appraisal education looking for the product not wanting any details. I feel like a human AVM. I truly hate what I have been reduced to. I need to pay my bills. What am I to do?

  • If someone asked me to do a 1004 for $160.00 I would get them to give me the comps and inspect the property first, put all of the work together and all I would have to do is sign it.
    P.S. Tell them to pay your medical, Life, & E&O insurance while you’re at it because you can’t afford to @ $160.00

  • I have been an appraiser for 6 years and I have been doing everything by the book. Now I am being punished and will lose my carrier, my house and employment. What a terrible law/rule.. I can’t beleive this…. Do you guys think this will stick?? or can we still stop it???

  • I have been appraising for 5 years so I am a new appraiser. How can I get information on the AMC’s in my area (Denver, Colorado)? I am interested in the names of the companies and their information, hoping this will help me to determine which AMC I want to be associated with.

    So far, what I have seen and what I know, AMC’s are a real disappointment for me as I have spend a lot of time and a small fortune becoming an appraisal professional. I am trying to make sense out of the non-sense of the HVCC requirement.

  • Does anyone know of a law firm who is compiling a list of appraisers to join in on a class action lawsuit with regard to the HVCC ruling? How can it be legal for AMC’s to take 50% of appraiser fees nationwide?

  • Re: Igor L’s Question

    Yes it will stick. I’ve written to half of the memebers of Congress, my state attorney general, the governor, OFHEO, FNMA, Freddie Mac, etc. over the past 12 months to warn them about the mass migration of appraisrs that will take place soon. Not one of them bothered to contact me. Banking interests support HVCC and they dare not cause a stir. It’s a done deal…learn to support yourself working for free or find a new career.

    Re: Kathy C’s Question

    The National Association Of Mortgage Brokers is in the process of filing a lawsuit to stop HVCC. They are inviting appraisers and realtors to join. If it goes anywhere it will take years to amount to anything. Personally, I don’t think they stand of chance.

    A large law firm in Washington State also has class action lawsuits filed against Countrywide, Wells Fargo, etc. for racketeering charges, skimming appraisers fees, etc. It sounds nice but again we’ll all be out of business before it goes anywhere.

    I’ve been accused of being negative about this. I think I’m being a realist though. Not only is the sky falling [see HVCC]; the sea is rising at the same time [see 1004MC]. We decided to close our doors after 17 years in the business rather than allow the government to serve up our testicles as pancakes.

    Best of luck to everyone!

  • I think the appraisal business needs a bail out. Does anybody have a corporate jet I can use to go to Washington? How about some bribe money for Obama, his tax cheating cabinet, and the idiots in congress?

    Good luck friends….sorry….Comrades


    After months of writing to members of Congress I received a return phone call today from Senator Jim Bunning’s office. I suspect the phone call came about only after my third letter informed him that I would take up the matter with the candidate that is seeking his seat in the next election.

    Do you think anything will come of our upcoming meeting? Not a chance.

    We started contacting media agencies across the country and sending them info on the class action lawsuits that are taking place concerning AMCs. We also send along the outstanding story that was written for the Washington Post by Kenneth Harney. I invite you guys to do the same. Slowly but surely the public is becoming aware of the fact that they are being lied to on the HUD-1. They’are also become aware of the racketeering charges that have been filed against the major AMCs.

    This is the way folks….the only way actually. Inform the media, let the media get the public worked up, the public will put Congress in the hot seat, and Congress will put FNMA & Freddie Mac in the hot seat.

    Just take 10 minutes and email the info that I’ve mentioned to 2 media sources (local or regional). You will be amazed how fast news travels. In four weeks the story has been mentioned on AOL, Business Week, The Washington Post, & the Chicago Tribune. If you guys help out…it will travel much quicker.

    Thanks for your help

  • There is no forced AMC provision for Appraisers in the document, get your facts straight.

  • My facts are straight. If you are an appraiser accepting lender work…you’ll be working for 1/2 of the fee you made 1 month ago (the same you earned in 1992). In addition you’ll be doing twice the work (once you finally figure out how to fill out the 1004MC). In short…you’ll be earning 1/4 of last years fee.

  • I have read the HVCC rules, however, is this a voluntary item by Fannie and Freddie or is this mandatory legislation? Sounds dumb, but any reference would be appreciated.

  • Mandatory for all FNMA & Freddie Mac appraisal orders. Although it does not technically say you must use an AMC to order the appraisal, no other significant alternatives exist. It also doesn’t mention that you must AMCs for FHA orders but everyone is ordering them through AMCs as well to make their lives easier and to be on the safe side. Our volume dropped from 40 jobs per month to 1. We refuse to work with AMCs and we fully explain to every AMC that calls that they are lower than snails on the food chain. The only beings lower than AMCs are Cuomo, banks, & the congressman that allowed this to happen.

    Thank God, consumers are now fully protected by HVCC.

  • Amazing how much misinformation is given in this article and taken as gospel. Not all AMC’s take 40 or 50 pecent. I am working with one that has a set fee of $45, and the appraiser sets their own fee. No loss to the appraiser at all. I used to be a licensed appraiser and quit the business because of all the pressure put on appraisers to “hit a number” by the brokers, loan officers and real estate agents. No matter how honest an appraiser you are, you are subjected to this pressure and subjected to the loss of business and income if you don’t hit it. I couldn’t operate that way and choose to leave the appraisal business. I think this is a long time coming and a good thing for the industry as a whole. Yes the brokers, loan officers and real estate agents no longer have that business relationship, and that is the whole purpose of the rule.

  • RSW – I understand where you are coming from, but was it only mortgage brokers and their loan officers who PRESSURED you to hit the magic numbers. I seem to remember mortgage bankers, and originators who worked for lenders also putting pressure on the appraisers. Like you, I believe closer oversight was needed. Is HVCC the answer, time will tell. What is very clear, is the playing field is not level for all originators. HVCC should apply to all segments of the lending, brokers, bankers etc.

  • Ok, so maybe this sounds crazy….but just hear me out. I have been an appraiser for 23 years now. I started back when you needed to work with someone to get started, but there were no licenses etc. It has ALWAYS occured to me that the problem with the appraisal business is…ready? Appraisers!!! We have never, it seems, regarded ourselves to be professionals, worthy of charging a reasonable fee for providing a service. It has always been a case of the tail wagging the dog for us….our clients need, and are required, to use our services, but they have always told us what to do, and what we are to be paid. I seems to me that most other professional services are just not that way… Do they tell an attorney what to charge? Do they tell the broker what the commissions will be? Do they tell a surveyor what they will charge? NO! So, here is what we need to do: (1) Lets recognize that we are highly trained and highly regulated professionals (2) Lets ALL charge what we are worth. Lets not cow down to the requests of management companies to split our fee to a point where we are prostituting our services. Imagine, what would happen if we all told our clients, whoever they may be, that we charge $450.00 for a 1004 w/1004MC report and that our fee is common and non-negotiable. Wow! Imagine it! Us, telling our clients what we expect for compensation for our services that we provide? What a novel idea, which is too bad that it ever got this way huh? The short of it is this: We are well qualified professionals with licenses to do what we do; We are in a heavily regulated industry that requires us to stay on our toes, take classes to maintain our expertise, and provide a service that must be above reproach. We Need to Take Control Of Our Own Industry! Think About It!

  • Just a heads up, we have posted an HVCC Update at LeadPress:

  • One has to admit that the ethical appriasers are definitely being hit here, but like any industry, take accounting and arthur anderson for example, some nonethical firms end up ruining it for everyone else. now the necessary regulation is needed.

  • What would be wrong with a broker being able to order an HVCC compliant appraisal from a AMC and then submiting to a lender or even lenders of their choice. That would not affect the appraisal but still allow the broker to have more control of the transaction and help get the best deal for the consumer/borrower.

  • I go my first HVCC appraisal today. Before I ordered it I asked two competent, honest and local appriasers I have done business pre-HVCC to give me an approximate range – I didn’t indicate what value would be needed for the loan.
    The HVCC appraisal I got back was $100k (15%) less than this range. The appriaser chosen was from 60 miles away in a completely different market (San Francisco City cf. South Bay area). The comps they used were close-by but from very different neigborhoods… the appraiser was ultra conservative in the value even compared to the adjusted comps.
    The lender/AMC charged the borrower $435, the appraiser charged $325 and a lot of that would be taken up by gas.
    With this new ‘value’, the borrower wll not be able to stablize their IO ARM into a 30yr fixed and will likley face problems later when the ARM adjusts and rates are higher.
    How is this helping the consumer and the housing market?

  • This code is going to make mortgages more costly for the consumer. That is the person or people that it is supposed to protect??? A few bad apples and you are punishing all??? Maybe you should be more focused on the bad apples and weed them out instead of raising costs and time for people to be able to buy or refinance a house. Laws are sometimes too prohibitive and in this case it is certainly the result of some “bad apples” affecting the entire country!

  • Thank you Mark Smith. This is the first real world example of the effect of the HVCC disaster in action.

  • Thanks Emily.
    I have a feeling it won’t be the only instance.
    NAMB are inviting brokers to share their negative experiences about the HVCC so they can build a case against it.
    See below:

    HVCC Study: NAMB succeeded in getting language secured in the managers’ amendment which called for a study on the effects of the Home Valuation Code of Conduct (HVCC) on consumers and small business. NAMB made every effort to obtain a 12 month delay of the HVCC, however this study will more effectively illustrate the damaging effects the HVCC is having on consumers and the marketplace. Representatives Gary Miller (R-CA), Travis Childers (D-MS), Donald Manzullo (R-IL), and Michele Bachman (R-MN) all spoke out strongly against the HVCC and in support of the 12 month delay during markup of the bill. If you have specific examples (including documentation) of ways the HVCC has affected you or your consumers, please forward this information with your name and contact information to NAMB is collecting this information at the request of the Federal Housing Finance Agency (FHFA).

  • Mortgage broker owner since 1986. My company selects appraisers that can defend their values before and after closing if need be. They are part of my quality control and know that if they bend to a loan officer, Realtor, or client and provide a bad appraisal, they are history. One commission doesn’t make a career but one buy back does. Yet, this program penalizes the broker that has their business on the line and the consumer with higher fees yet allows banks the flexibility to set up sweet affiliations that will do what needs to be done to protect their business with a higher cost option. You can bet those banks and appraisal companies will make sure their lobbyists keep this law in place.

  • I wanted to write to you to tell you how the new appraisal HVCC law is working in the real world I live in. My husband has been a Real Estate appraiser for 10 years. In that time he has worked hard to build his client base and make a living for our family. When he started, he was a trainee for almost one year and worked for $20.00 per appraisal; while the supervisor appraiser made 95% of the fee. In some cases, he spent more in gas than what he made. He did this to built a business and a career. He has never had a complaint filed against his license nor been removed from a lender for below par services. At 55 years old, it will be difficult for our family to recover financially if what we see so far is an indication of what is to come.

    In preparation for the changes in the law, it was necessary for him to get approved with “AMC” (appraisal management companies). He has gotten approved with approximately 30 companies in order to continue with his business. Since the law went into effect on May 1st, he has received “ZERO” appraisal orders from AMC’s, thus basically putting him out of business. Where are these orders going?
    Is anyone out there actually getting orders from these companies?

    This new law has basically taken thousands of hard working appraisers and taken away their living. This new law is not being fairly applied. Here is what I am seeing from this new law:

    1. Lenders are now affiliated and partially owning AMC companies.
    2. Lenders are “hand picking” their appraisal crews, then assigning them to an AMC company that no other appraisers are allowed to apply for. How is this being “unbiased” when the lenders are selecting the appraisers and the AMC company that must be used.
    3. AMC companies are taking up to 40% of the appraisal fees
    4. Lenders are dictating to brokers that they can not order from whatever AMC company of their choice, that they must order only through the lenders chosen AMC company, which in many cases is affiliated with the lenders.

    The lenders have always been the problem, not the appraisers. You have single handedly given the lenders exactly what they wanted…..all the control, a piece of the action for collection of the money as well as taking profit from it.

    In closing, the bill was poorly written and created a whole new set of problems. It needs to be revamped now. If you really want to create a change in the law, my recommendation it to have a central office at FNMA that handles assignment of all appraisals, similar to how VA distributes them. That way, there is no lender involvement, no fees distribution, and no arm twisting to hit values.

    Our government seems to have no idea what they are doing. On the surface HVCC sounded good. The reality is that the government and lenders have their “hands in the cookie jar”, once again.

    Something really stinks with this new law and it isn’t the appraisers! This is corporate greed and corruption at its finest. I guess I will need to figure out how I can pay our house payment next month. You can count on more foreclosures to come from all the appraisers that will be put out of business.

  • It is my understanding that value checks are not allowed under the HVCC. I was just told by a mortgage broker that I was the only appraiser that was refusing to do them because of the new HVCC. She stated that all the other appraisers she deals with are still doing them. Am I misreading the HVCC? If not, I am losing a good portion of my business by being honest because apparently, according to the mortgage broker, I am in the minority.

  • Patti P,

    How is the mortgage broker even able to send you appraisal requests under HVCC, let alone ask for value checks?


  • Why is the criteria for a Realtor so minimal? Who puts the initial price of the home out on market? Who starts the pressure process? Who has the largest lobby? A Realtor is forced to be part of this lobby group or it can not be part of a local association in our area and they must be part of the association to list properties on MRIS.

    Follow the flow of a real estate transaction and explain to me why the person who receives the least compensation is the most regulated and educated????

  • I did get an AMC order today. The company SecurityOne is sharing an office with the lender Taylor Bean and the lender’s name comes on the call id when the AMC calls me.

    This is a joke.

    How hard is it to put together an unbiased rotating system? I know for a fact that an Oracle database can be created and supply a fair system.

  • Here’s my experience – The cost for a Single family appraisal cost increased 37%(before HVCC $270, after HVCC $370). Non-owner occupied 2-4 unit appraisal increase over 50%. (all while the appraiser who is responsible for the appraisal receives less) … and for that cost increase, did we get lower interest rates?, lender costs?, or faster underwriting times? Of course not. Find out who makes money on this (appraisal management companies) and you will probably find out who sat back and did not exert any effort to fight this program.

  • HVCC and AMC’s are a total joke…a real fckn joke that is now strangling the average appraiser. It was bad enough that since I started in 1989 that appraisal fees barely went up with inflation; in 1989 I was getting $250…! Now with MAC’s taking 25-50% of the fee… appraisal fees are going backwards! Now I understand this will cut out fraud and question; but the matter of fact is the consumer is getting jacked, the appraiser is getting jacked..who makes the money? Thats right dumbass MAC fcks who have no fckn idea what an appraisal even is…they are just along for the ride! The federal govt., Fannie Mae, Obama, Cuomo,..etc, etc. etc are ALL a real fckn joke…and we appraisers are the punchline! Sad but true-Metallica

  • @ Thomas

    The seller decides what the home is listed for, not the Realtor. The Realtor shows them the listings, pendings and closed sales to educate them about the market so they can make an informed choice. That being said, there are many agents who will over list a home just to get the listing. (very stupid thing to do)

    This would be the same as doing comp checks to get business as an appraiser. (whore yourself out now and they will repect you later – ha ha ha)

    As far as the least trained making the most, those of us (Realtors) that are still in this market know how to sell. Nothing happens until something is sold. There is no need for the appraisal or the loan until the home is sold.

    Thomas – I am an appraiser who has become a Realtor as well. Get your sales license!!! Buyers and sellers need Realtor’s who understand the market, and NOBODY understands it better that an appraiser. Trust me on this. I have been selling homes and closing them in this market and will soon be making more selling than I ever did appraising.

    The best part is that I get to truly help people who desperately need me and appreciate me because I know what the hell is going on…

    Good luck.

  • Get A Clue!

    HVCC is a blessing from almighty God to Consumers; and, it is indeed some of these same whiney industry insiders who perpetuated this capital chaos while playing their speculative insider games unchecked for decades, and, all their greedy little sheepish simps of course too, who do/did not want this all to change!!

  • Please sign the petition below. It is going to Andrew Cuomo and asks to have the HVCC reversed.

    Susan Kelly you should educate yourself before you come to such niave conclusions. let’s get this thing reversed!!! It’s been a disaster. Forward to everyone

  • Just like all Government programs, the pendulum always swings too far in the other direction, with the Sub Prime Loans, they let any one buy a home, they did not need money, a job or a SS number and Greed took over the Industry.

    With the Appraisers, yea who can deny there were issues with them and the Realtors, Lenders, and the buyers and sellers. All were just looking at the mighty dollar and how can I get a check, if I don’t do this someone else will…

    But as Big Brother always does they create a problem, swing the Pendulum all the way from the Left to the Right, never consider stopping near the middle where it may make a little since.

    We just all need to hang on and mark my words, in a year or two it will swing past the middle and back to the other direction, maybe not as far as it was a couple of years ago but it will swing too far again.

    When we do our job, we just need to always ask our self “Does this make since?”

    This accounts for 90% of the average person (Appraisers, Realtors, Lenders) on the street trying to make a living, this in no way accounts to ANY Politician, they never ask the question “Does this make Since?”

    Roger Paschal
    RE/MAX Trinity
    Fort Worth Texas

  • Susan Kelly, you made such an asinine statement. HVCC is actually horrible for the consumer. It’s so easy to make a blanket statement such as yours with not bit of reason to back it up. But the statement in it self requires a rebuttal.

    If all reports are required to go through AMC’s who set’s the cost of the report. I did a report last week for $550.00 The price I would have typically charged, now this was for a bank, not an AMC who would have paid at the most $275.00 The bank charged $750.00

    I’m sure the AMC would have charged $750.00 also. So because of your beloved HVCC, the borrower is now paying $200.00 more for this particular report.

    Right now in a down market where the demand for our services is less then the supply, the appraisers are taking the blunt if not 100% of the UN-NECESSARY cost of working with AMC’s

    When the market come’s back, and their is a sever shortage of appraisers, We collectively will not work for the sub standard fees that the economy now forces upon us. What then. Will as AMC will have to pay us as fair wage if the want the volume to flow, and as the will need to tack on their UN-NECESSARY cost, who do you think will end up paying more for the report. That’s right the consumer will get screwed.

    If a consumer wants a loan, one has the option of going through a Loan Broker who can find the best fit for that borrower, many time’s in which a loan rate may change, or a package may be better fit for a different lender as circumstance change. Now if a consumer wants to check the fit with three different lenders, he has to pay for THREE different reports. Now Susan my dear, how blessed are the consumers.

    A home has not one value, but a range of value. So let’s say the blessed consumer requires a appraised value of $600.00 and the range is only $450,000 to $525,000 not a chance in hell of it coming in any higher. Your blessed consumer can no longer get a comp check from the bank, no they fork out a full cost for a report that is a pure waste of their money. Oh lucky them.

    If that’s not enough, lets take a near same situation. A home has not one value, but a range of value. So let’s say the blessed consumer requires a appraised value of $495,000 and the range is only $450,000 to $525,000 The appraiser very comfortably brings in the value at $490,000 He could have just as easily supported $500,000 but as it make’s no difference as far as the appraiser go’s, Who cares, why not just be conservative. I’ll never get any feedback.

    The borrower finds themselves either losing the loan, or paying a higher interest rate, cost them thousands over the life of the loan, because the loan to value, although truly supportable was not supported in the report as written. WOW Susan Kelly how blessed are they now.

    As you limited your ill thought out comment to the consumer, ill not fill your wee brain with the many other reasons the HVCC is good for non but the big lenders who only wish is to control 100% of the process.

    So Susan if you can muster up an intelligent response, Ill be looking for it. But I won’t hold my breath.


  • Mark – thank you for comments of just a couple scenarios with HVCC. One of which I just experienced. Not able to get comps anymore we came up short on value. Surprise! I had completed a loan on this same property two years ago valued then at 535k only needing value to come in at 435K to complete this new loan we thought even with decline in market we would be ok. Unable to check comps with any appraisers we moved forward with LandSafe – an affilate of Countrywide now Bank Of America. The order took over 30 days to get the report back, value was
    370K so our deal is DEAD. Bank of America owns Landsafe now accquired with the purchase of Countrywide. Should the lenders have an interest in the appraisal companies?

    My borrower just paid 700.00 for an appraisal that normally would have cost 575.00 but never would have been ordered if we had comps. No communication is never good in any situation. NOT having this valuable tool is counter productive and only hurts the consumer. My 89 yrs old client is out $700.00.

    Susan Kelly how blessed is my client.

  • New Mortgage Broker Tactics

    1) This is an FHA loan so doing a precomp isn’t an issue (HVCC doesn’t apply).

    Question: How do we know that it’s an FHA loan…they can say that about every deal…so we just say no to all precomps now.

    2) The Mortgage Broker can no longer give an appraiser an estimated value. Here’s their answer to this problem: Have the Realtor plant the info in the appraiser’s mind or the borrower. Nearly every borrower that I’ve met since May 1st has told me the value they need to make the deal work. What an amazing coincidence.

  • I am in complete agreement with M.R.K. above. HVCC and the down market will rid the appraisal industry of tens of thousands of appraisers. Once the housing market comes back appraisers will be able to name their fee. [Think 2.5 years of pent-up demand on top of the regular year’s business] The number of new appraisers entering the business hit 0 over a year ago. With HVCC it is guaranteed to remain at zero. With this type of shortage $1,000 appraisals are only a fee years away.

    I also predict that HVCC will undergo extreme changes in the near future.

    The appraisers that are left are fighting mad.
    The Mortgage Brokers that are left are fighting mad.
    Realtors are just catching on to the fact that their paychecks will be affected.
    Borrowers are now being hit with the fact that 2 $450 appraisals are requied.

    The proverbial ship will not hit the fan until the number of outraged borrowers reaches critical mass. Then look out Congress.

  • Hiya. We’ve put together an HVCC Group, Thread and Update Center at LeadPress. Please sign up if you want to be in the loop on the latest HVCC happenings. You also get a FREE mortgage, appraisal or real estate blog when you sign up. :)




  • The HVCC is horrible and killing eb=very Appraiser’s business, especially Minority Appraisers. The only thing thats keeping me in Business is FHA Appraisals. I’m a Certified Residential in Ga and I can’t get on any of the Bank’s Conventional Rotation! I even have Client’s whose had to fight their own folks who control the list and they still can’t even get me on the list. All the banks are keeping the Good Ole Boy network going even though the Appraiser’s a Lazy. I have Client’s tell me that the Appraiser’s are taking 2 weeks to complete an assignment, that the quality is terrible and if anything else is needed, the appraisers are basically telling them to piss off! The few AMC’s I’ve worked with are terrible, un-organized and some don’t even communicate with the Appraiser. They’re u/w dept. takes 4 weeks to look at a file and by then the Borrower has lost their Rate and their calling me asking what’s going on. Oh yeah, they take 45-60 days to pay the Appraiser, try feeding your family and paying your bills while waiting that long for a check, Thanks Mr. Cuomo!

  • I’ve been reading about HVCC and can say I’m really not terribly pleased about this stupid excuse for a law. The inherent conflicts of interest in this law tell me some congress representatives were taken out to some really fine lunches.

    To David:

    You indicated that HVCC would affect Realtors’ paychecks. How? Could you elaborate on this factor?




  • My husband and I have been trying to purchase vacation home, and this new third party system has held up our sale. We had a contract w/expiration date and had signed into contract w/ a great deal, but because of this new law if the seller does not agreed to extention we could loose the contract price. We have already lost our 4.875 interest rate we locked in. The appraisal was done a week ago, but the vendor has not sent to mortgage company. So I think this new law is very unfair to home buyers. I further believe this new law will create more lost monies to consumer and more money to banks, as this appraisal was paid for out of pocket expenses from us the buyer.

  • AG Cuomo owns an appraisal management company and forced lenders to use appraisal management companies

    appraisals are costing home owners and the banks are making more profit off the backs of homeowners.

    Appraisers can no longer market for work, we wait on a rotation that has no bearing on experience. Lower prices and quick timings result in poor quality appraisal reporting.

  • Well, it has been over a month since HVCC went full force with FHA. While I initially welcomed the change, thinking of all of the high pressure lenders, comp checks, and repetitive calling I would not be dealing it, the post 02/15 change has been worse than I possibly could imagine. Dealing with the AMC’s is exhausting. They demand an appointment be set the same day, and the report be turned in 24 hours from the time you inspect it. It is hard to complete a perfect USPAP compliant report when you are under those deadlines and they assign workload based on their rating system which is 100% turn time based without any respect to quality. They have their own levels of underwriting, so getting stipped right away and demanding those back within four hours is normal for them. Worse off, they charge the customer $445 and pay the appraiser the lowest going rate. We tested with Streetlinks, the second we dropped our rate from $300 to $250, we were bomboarded – back up to $300, nada. The customer is of course not being informed of any of this, I have had them complain several times of why appraisers raised their rates so much. I used to enjoy the customers, houses, and the work. Now I feel like a hamster on an insufferable wheel that doesn’t stop turning. It is a massive devaluation to the industry and the only people getting rich are the unregulated AMC’s, which coincidentally are often owned by the very banks that blame the appraiser’s for their foreclosure rates. I am going to give this two more years and I am going to have to look for a new profession.

  • The HVCC is just another example of the government making arbitrary decisions without considering the consequences.
    Qualified appraisers are leaving the profession in droves because of reduced fees and consumers are paying more for appraisal products (thinking the money is going to the appraiser). A recent study said that the HVCC added 2.8 billion dollars to appraisal cost last year with all of the money going to AMC’s with little or no appraisal expertise. There is also a question concerning USPAP violations under the current way AMC’s operate. USPAP requires that an appraiser discloses anything of value given in return for appraisal assignments. AMC’s require appraisers do not submit an invoice and cannot discuss fees with lenders or borrowers……Isnt taking 40% less for an appraisal working for the AMC’s giving something up of value? After all, you can either accept the reduced fee of not get any work. The HVCC effectively tried, convicted, and punished all appraisers for the misdeeds of some appraisers and mortgage brokers and now has left the appraisal profession to trainees and unqualified out of area appraisers that base amount of work which affects the quality on the fee received. Appraiser cost go up yearly in the form of dues, education, and licensing fees while the government has supported and implemented rules that drive appraiser income down. Some AMC’s now require ACI software submission of appraisals in which they are building AVM’s to sell lenders. The software cost appraisers another yearly fee and often a fee per upload. This requirement is effectively making the appraiser pay to put himself out of business. After 10 years I am considering leaving the appraisal profession since I refuse to work for 1/2 fees just to put ridiculous profit in the pocket of an AMC.

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