NAR: Looks Like Home Valuation Code of COnduct Issues are Slowing Home Sales – #HVCC

Great post by Robert Freedman, Senior Editor, REALTOR® Magazine

For weeks, NAR (National Association of Realtors) has been getting e-mails and phone calls on problems caused by the implementation of the Home Valuation Code of Conduct. If you’re not familiar with HVCC, it’s an agreement entered into between the two secondary mortgage market companies Fannie Mae and Feddie Mac and the State of New York. The intent of the agreement is laudable: to curb the kind of inaccurate appraisals that helped fuel the housing meltdown.

But HVCC has turned out to be a problem in its own right, judging from everything we’re hearing, and not just for real estate deals in New York. The two mortgage companies are applying HVCC rules to all mortgages they handle, regardless of state, so any problems with HVCC are nationwide in scope.

Here’s a sample of what our researchers found:

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76 percent of practioners say the time to obtain a completed appraisal increased after May 1 (the date of HVCC implementation), with 69 percent of those saying the increase has been more than eight days.

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37 percent says sales have been lost because of the appraisal rules, with 20 percent saying they’ve lost multiple sales. This is especially unfortunate, since market data suggests we have pent-up demand for housing.

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70 percent say out-of-area appraisers have been used. This is important because our members say out-of-area appraisers can’t be counted on to have intimate knowledge of a market and can therefore miss details on comparables and other facts that can affect price.

Read the entire post from Robert Freedman.  NAR Post on HVCC Issues with Appraisals which are slowing down House Sales in the US.

Given the amount of concern the issue has generated (a blog entry
by one of NAR’s officers, Steve Brown, generated more than 150
comments), a good look at what’s happening is clearly needed. At a
minimum, NAR’s findings give everyone some hard data to look at and
consider.