As we’ve covered in detail, the so-called Home Valuation Code of Conduct (HVCC) went into effect today, which officially cuts off mortgage loan officers from ordering appraisals or even talking to appraisers during a property transaction. Specifically, this is for Fannie/Freddie qualified loans, and portfolio loans (like jumbo mortgages) do not have to comply since HVCC isn’t a Washington regulation but rather an industry regulation.
This is the source of much debate in the industry. The positive: it’s designed to cut down on fraud. The negative: it makes evaluating options more expensive for the consumer, because a property’s value cannot be vetted by a professional appraiser before a consumer chooses to enter into a transaction. There will surely be more debate, or at least reaction, over the coming months. In the meantime, below are some links to more information on HVCC and here’s a good Appraisal Institute Q&A.
- Fannie Mae (HVCC and Frequently Asked Questions)
- Freddie Mac (HVCC and Frequently Asked Questions)
- Federal Housing Finance Agency on HVCC