What the HVCC(Home Valuation code of Conduct)

Means to you, the Retail or Direct Lender

Are you aware that the HVCC goes into effect May 1st, 2009? Do you understand the implications for your business?

What is the HVCC?

Simply put, the HVCC will change appraisals for all scales of residential mortgage lending drastically. Now, you may have heard things such as NAMB filing a lawsuit in an attempt to block this law. There has been an overwhelming cry of outrage since this legislation was announced in 2008. However deserved the criticism, we believe that the HVCC is unstoppable. Why? We offer just one good example: the ban against Nehemiah style DPA programs. That legislation also had hundreds of thousands of signatures opposing and a lot of funding against it, yet still passed.

Do you sell direct to Fannie Mae or Freddie Mac? Perhaps you broker a percentage of your business to wholesale investors who do. Either way, you must resign yourself to the fact that your funding sources may require you to observe the HVCC. Many wholesale investors have already announced their requirements for the HVCC.

Of course, the HVCC does not apply to FHA loans, and there is a chance(slim) that it may not pass. However, you ignore the new requirements of the HVCC at your own risk. While some aspects of the Home Valuation code of conduct may have yet to be interpreted, it's a sure bet that some of them will soon be affecting your bottom line. One of the main components of the law is required use of either internal management, or an appraisal management company such as Virtue. In our dealings we have seen some investors already state internal management is not accepted.

Face the facts. The HVCC also modifies USPAP and places new burdens on you; meaning potential unsaleable loans stuck in your warehouse line(Not really looking to get into the servicing business, were you?). Since Virtue is built on the oldest and largest existing appraisal network nationwide(Alamode's Mercury), you will never have compliance, legal or ease-of-use problems. With the largest single roster of appraisers, you will also never struggle to find a competent appraiser, no matter where your subject property is.

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