Survey shows HVCC affecting housing

It appears that regulations designed to protect consumers may actually be helping to raise costs and delay closings.

The Home Valuation Code of Conduct (HVCC), which took effect May 1, was established to set standards for solicitation, selection, compensation, conflicts of interest and appraiser independence and applies to any mortgage that will be sold to Fannie Mae or Freddie Mac.

Since the HVCC took effect, however, consumers are seeing higher home appraisal costs, delays in closings, lost sales and an inconsistent quality of appraisals, according to a recent NAR survey.

Approximately 76 percent of REALTORS® responding indicated that they’ve seen an increase in the amount of time it takes to obtain a completed appraisal since May 1. Nearly 37 percent reported lost sales due to a delayed appraisal.

To address these concerns, NAR is working at the federal level to pass HR 3044, which would put an 18-month moratorium on the HVCC. Co-sponsored by Rep. Paul Kanjorski (D-Pa), the bill has 37 legislators backing it. NAR is asking REALTORS® to contact their federal legislators asking them to support HR 3044.

PAR has formed the Appraisal Management Companies (AMCs) Task Force, which has been working with legislators and other organizations to finalize language that would regulate AMCs and bring them under the jurisdiction of the State Board of Certified Real Estate Appraisers.