Every homeowner wants to ensure they get the valued home he/she pays for but has government oversight hindered the appraisal process? Homeowners rarely understand the behind-the-scenes home buying game and what it truly takes to purchase the home. Everyone plays an important role but recently tales of coercion on the part of the mortgage industry has lead Congress to introduce a new law; the Home Valuation Code of Conduct (HVCC). It has changed the process for getting an appraisal completed on a home. The well-intentioned law both protects homeowners from shady double dealing and in-turn has put many appraisers out of business. Before May 1^st mortgage brokers, lenders and real estate agents could use well-known appraisers to thoroughly appraise a home; with a new law enforced, only mortgage lenders can now order up appraisals. It all sounds like a great idea since the mortgage lender is the one risking the loan – why shouldn’t they be the one to order the appraisal to protect them, right? Well the problem was more about the “good ole boy’s network” and long-time relationships providing whatever the need called for.  If a certain broker needed an appraisal he or she would call up XYZ Company and send out long time associate “Charlie” to do the appraisal.  The broker made it clear that the home was worth $500,000 and the appraisal needed to be worth the same.  Low and behold, the appraisal came in at that amount. XYZ got their inflated appraisal fee and everyone was happy…even if the basement of that appraised home was flooded, damaged and covered up…”Charlie” still appraised it at the value the mortgage broker had asked for because if he didn’t he knew future business would dry up. The new HVCC requirement. In simple terms, HVCC requires that appraisal management companies be used in the ordering of appraisals. Loan officers and realtors, who in the past could choose the appraiser, are no longer allowed to do so. The result, many argue, has been appraisers being used in areas where they may lack in-depth market knowledge. From the appraisers perspective, they are being forced to do appraisals for less money outside of their normal geographic area of expertise. Remember homeowners, you get what you pay for. How will homeowners be impacted by this new HVCC law? The Pro’s – homeowners will still get an appraisal which should not delay closing on their homes. The Con’s – are homeowners getting a comprehensive appraisal that really benefits them? Or are they receiving quick, fast and in a hurry reports for the lender’s sake? Of course, many lenders and appraisal companies deny this and until there is any concrete proof to the allegations the new code is in effect. Homeowners who feel their best interests are not being met can always discuss their issues with their realtor or lender who can help provide possible solutions.

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