On May 1, 2009 (updated March 2010) a new set of rules went into effect for appraisals of residential real estate (1-4 units). The Home Valuation Code of Conduct (HVCC) dictates certain practices lenders must follow if they intend to sell the loans to Fannie Mae or Freddie Mac. The HVCC worked out an agreement between Fannie, Freddie, and the New York Atty. General’s office; this was in response to an investigation. The purpose of the HVCC is to insulate the appraisal process from undue influence by placing tight controls and restrictions on the ordering of an appraiser, as well as guidelines for communicating with the appraiser during the process.
It’s important to understand, as real estate investors and consumers, how the new Home Valuation Code of Conduct can affect appraisals on properties.
Here are some facts and myths you should be aware of.
Fact: The code requires lenders to order appraisals themselves, rather than accept any one that a mortgage broker, Real Estate Broker/Agent or other third party has chosen, hired, or paid.
Fact: The code requires lenders to ensure that borrowers… Continue Reading
