Bartow Hvcc 10 15 2009

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The Home Valuation Code of Conduct, What Was, What Is, What\'s to Come

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Bartow Hvcc 10 15 2009

  1. 1. Francois K. Gregoire, IFA, RAA State Certified Residential Appraiser #142 What Was, What Is, What’s to Come HVCC
  2. 2. PREPARED FOR: <ul><li>Bartow Board of REALTORS © </li></ul>
  3. 3. about Frank………... <ul><li>Licensed since 1976 </li></ul><ul><li>Realtor® since 1977 </li></ul><ul><li>Appraising since 1977 </li></ul><ul><li>State-Certified Residential Appraiser since 1989 </li></ul>
  4. 4. about Frank………... <ul><li>Real Estate License Law and Appraisal Instructor since 1977 </li></ul><ul><li>Member Florida Real Estate Appraisal Board February, 2000 – February, 2008 </li></ul><ul><li>Qualified Expert Witness - Pinellas County Circuit Court, United States Bankruptcy Court, Division of Administrative Hearings </li></ul>
  5. 5. TODAY – THE HVCC <ul><li>What Was </li></ul><ul><li>What Is </li></ul><ul><li>What’s to Come </li></ul>
  6. 6. What Was PRE-HVCC <ul><li>Options </li></ul><ul><ul><li>Appraiser Selection </li></ul></ul><ul><ul><ul><li>Direct </li></ul></ul></ul><ul><ul><ul><li>AMC </li></ul></ul></ul><ul><ul><li>Appraiser Compensation </li></ul></ul><ul><ul><ul><li>Collection by Appraiser </li></ul></ul></ul><ul><ul><ul><li>Collection at Settlement </li></ul></ul></ul><ul><ul><ul><li>AMC </li></ul></ul></ul>
  7. 7. What Was PRE-HVCC <ul><li>Loan Portability </li></ul><ul><ul><li>Assignment of Appraisal (lender/broker) </li></ul></ul>
  8. 8. What Was PRE-HVCC <ul><li>Problems </li></ul><ul><ul><li>Value Checks </li></ul></ul><ul><ul><li>Broadcast Appraisal Assignments </li></ul></ul><ul><ul><li>Pressure </li></ul></ul><ul><ul><ul><li>Value </li></ul></ul></ul><ul><ul><ul><li>Detrimental Conditions </li></ul></ul></ul><ul><ul><ul><li>Negative Influences </li></ul></ul></ul><ul><ul><li>Blacklists </li></ul></ul>
  9. 9. What Is – POST-HVCC <ul><li>Selection and Retention of Appraisers Restricted </li></ul><ul><li>Standards for Appraiser Independence Established </li></ul><ul><li>Applicable to all mortgage loans sold to Fannie Mae or Freddie Mac </li></ul>
  10. 10. What Is – POST HVCC <ul><li>Realtor, Broker, Mortgage Broker, Loan Production Staff </li></ul><ul><ul><li>Cannot select, retain, recommend or influence selection of appraiser </li></ul></ul><ul><ul><li>Cannot recommend appraiser for approved panel </li></ul></ul><ul><ul><li>Cannot blacklist appraiser from approved panel </li></ul></ul><ul><ul><li>Cannot compensate appraiser </li></ul></ul>
  11. 11. What Is – POST HVCC <ul><li>Loan Production Staff Prohibitions </li></ul><ul><ul><li>Substantive communication with appraiser </li></ul></ul><ul><ul><li>Obtaining additional appraisals or AVMs unless conditions met </li></ul></ul><ul><ul><li>Activity to impair or restrict appraiser’s </li></ul></ul><ul><ul><ul><li>Independence </li></ul></ul></ul><ul><ul><ul><li>Objectivity </li></ul></ul></ul><ul><ul><ul><li>Impartiality </li></ul></ul></ul>
  12. 12. What Is – POST HVCC <ul><li>Lender Requirements </li></ul><ul><ul><li>Quality Control Testing </li></ul></ul><ul><ul><ul><li>10% or statistically significant </li></ul></ul></ul><ul><ul><ul><li>Report adverse findings to Fannie/Freddie </li></ul></ul></ul><ul><ul><li>Refer Appraiser and Appraisal Management Misconduct </li></ul></ul><ul><ul><li>Warrant compliance with the HVCC </li></ul></ul>
  13. 13. What Is – POST HVCC <ul><li>Borrowers </li></ul><ul><ul><li>Higher fees </li></ul></ul><ul><ul><li>Fewer loan options </li></ul></ul><ul><ul><li>Delayed interest rate locks </li></ul></ul><ul><ul><li>Lengthened loan approval process </li></ul></ul><ul><ul><li>Possibility of multiple appraisals and fees </li></ul></ul><ul><ul><li>Entitled to copy of appraisal report PRIOR to the closing of the loan </li></ul></ul>
  14. 14. What Is – POST HVCC NAR Survey Results <ul><li>Increased time to receive appraisal </li></ul><ul><ul><li>Over 75% of members report receipt of appraisal report takes longer – most report increase of 8 days or longer </li></ul></ul><ul><ul><li>71% of Appraiser Members report less time allowed to complete appraisal report </li></ul></ul><ul><li>Increased use of out of area appraisers </li></ul><ul><ul><li>70% of members report higher instances of appraisers from distant areas – most see increase of up to 25% </li></ul></ul><ul><ul><li>Appraiser Members see 15% increase in assignments for unfamiliar geographic areas </li></ul></ul>
  15. 15. What Is – POST HVCC NAR Survey Results <ul><li>Consumers paying more for appraisals </li></ul><ul><ul><li>64% of members report increased appraisal cost to borrower – generally reported to be about $100.00 </li></ul></ul><ul><ul><li>53% of Appraiser Members report their fees REDUCED – 16% report reductions of 50% or more </li></ul></ul><ul><li>Perceived Reduction in Appraisal Quality </li></ul><ul><ul><li>86% of members perceive reduced quality </li></ul></ul><ul><ul><li>84% of Appraiser Members perceive reduced quality attributed to turn time requirements </li></ul></ul>
  16. 16. What’s to Come <ul><li>Efforts to Delay </li></ul><ul><ul><li>H.R. 3044 – 18 month moratorium </li></ul></ul><ul><ul><li>NAR Call to Action </li></ul></ul><ul><ul><li>NAR State Attorneys General Association Initiative </li></ul></ul><ul><ul><li>NAMB </li></ul></ul><ul><li>Independent Valuation Protection Institute (IVPI) </li></ul>
  17. 17. What’s to Come <ul><li>FHA Implementation – HVCC Light </li></ul><ul><ul><li>Appraiser Independence </li></ul></ul><ul><ul><li>Appraisal Portability </li></ul></ul><ul><ul><li>Appraisal Validity Periods </li></ul></ul>
  18. 18. What’s to Come <ul><li>Dealing With It </li></ul><ul><li>Regulation of Appraisal Management Companies </li></ul><ul><ul><li>NAR Policy </li></ul></ul><ul><ul><li>FAR Policy </li></ul></ul><ul><li>Prosecution of Incompetent (Experience and Geographic) Appraisers </li></ul>
  19. 19. What’s to Come <ul><li>Dealing With It - Demanding Competence </li></ul><ul><li>what license do you hold, what is the number? </li></ul><ul><li>when did you first obtain your license? </li></ul><ul><li>are you a licensed or certified appraiser, or are you a trainee appraiser? </li></ul><ul><li>where are you from? </li></ul><ul><li>when was the last time you appraised a property in my neighborhood? </li></ul>
  20. 20. What’s to Come <ul><li>Dealing With It - Demanding Competence </li></ul><ul><li>do you know any of the local Realtors or Agents in this area? </li></ul><ul><li>do you have access to the local Multiple Listing Service? </li></ul><ul><li>please give me a general physical description to enable me to recognize you at the appointment </li></ul>
  21. 21. What’s to Come <ul><li>Emerging Non-AMC Solutions </li></ul><ul><li>Appraiser Independence Management System </li></ul>
  22. 22. What’s to Come <ul><li>AIMS </li></ul><ul><ul><li>Identify a pool of trusted appraisers </li></ul></ul><ul><ul><li>Define and exercise specific policies that reflect your risk/quality posture </li></ul></ul><ul><ul><li>Proactively demonstrate Home Valuation Code of Conduct (HVCC) Conformity </li></ul></ul><ul><ul><li>Standardize collateral valuation operational processes across the lenders portfolio of mortgage products </li></ul></ul>
  23. 23. What’s to Come <ul><li>AIMS </li></ul><ul><ul><li>Approved Appraiser List and Management </li></ul></ul><ul><ul><li>Appraiser selection based on competencies and service area </li></ul></ul><ul><ul><li>Appraisal selection and cascading through candidate pool (in the event of assignment decline by appraiser) </li></ul></ul><ul><ul><li>Generation of appraisal requests with appropriate milestone events </li></ul></ul><ul><ul><li>Communication of Appraisal Conditions </li></ul></ul><ul><ul><li>Appraisal Request Generation </li></ul></ul><ul><ul><li>Broker Dashboard – Status Updates </li></ul></ul><ul><ul><li>HVCC Certificate with audited milestones in the ARC </li></ul></ul><ul><ul><li>Appraisal System and Management </li></ul></ul>
  24. 24. ????????? QUESTIONS
  25. 25. Francois K. Gregoire, IFA RAA State Certified Residential Appraiser #0000142 Gregoire & Gregoire, Inc Realtor - Appraiser 727-344-3393 [email_address]

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