The HVCC or Home Valuation Code of Conduct is a set of rules and regulations that affect appraiser, lender and mortgage brokers relations. It is true that the HVCC itself has some exceptions and loopholes. However, both Fannie Mae and Freddie Mac have their own, required interpretation, and some investors have already announced their own set of compliance rules.
Among other things, the Freddie Mac version prohibits any commissioned member of the loan production staff from communicating with an appraiser. It also requires lenders to provide a copy of the appraisal to the borrower no less than 3 days before closing. Appraisers may no longer collect their fee directly from the client. Download the official Freddie Mac fact sheet here:
The Fannie Mae version is very similar, containing the same "double blind" communication requirements, payment rules, and report release rules. Download the fact sheet here:
It is important to note that no language in the HVCC or Fannie/Freddie rules specifically prevent brokers or lenders from ordering directly from appraisers. However, there is a list of compliance that MUST be followed when doing so. Failure to follow this would result in a nonsalable loan to the wholesaler/retailer and a buyback to a broker. For brokers, many wholesale investors have announced that internal appraisal orders, the so called "management solution" is not acceptable; they are requiring brokers use AMC's.
The HVCC excludes FHA/VA Mortgages, Section 184 Native American Mortgages, and Section 502 Guaranteed Rural Housing Mortgages. VA mortgages are obviously unaffected since they are already processed through the VA, but it is rumored that HUD, the FHA and the New York Attorney General are working on a version of the HVCC adapted to FHA loans.
The HVCC does makes some changes to USPAP.
These changes take effect May 1st, 2009...is your company ready?
Exactly what does an AMC such as Virtue do to help?
Virtue gives a "firewall" between your staff and the appraisal process. Originators place the order at VAMC, we seamlessly assign it to the appraiser and handle all communications in full compliance.
VAMC also handles payment and the delivery of essential documents, such as purchase contracts to the end appraiser while observing all rules.
As required by law, VAMC keeps records of all communication which will come in handy if your valuation policies ever come into question.
VAMC tracks all creation and revision of reports. This protects appraisers and lenders both to testify that reports were not altered or influenced.
VAMC offers added convenience to Originators, you will be able to track and input additional information seamlessly through virtuemgmt.com during the process. Originators will also have unlimited, secure access to the report online.
The bottom line is
That Virtue Appraisal Management has studied and applied the HVCC so you don't have to worry about it. Why should you spend valuable time in a maze of rules and regulations, when you are browsing the website of such a simple answer? No fee to lenders ordering appraisals, and competitive fees for appraisers receiving. Contact us today for more information.
Virtue Appraisal Management is licensed by the CA Department of Corporations
