The appraisal industry sure has changed over the last several months. The Home Valuation Code of Conduct is here, and it has had quite an impact. The HVCC was designed with one main focus - to eliminate the pressure appraisers were experiencing to "hit values" on refinances and "make purchase prices" on sales. I believe from that perspective HVCC has worked, and worked well. These results have come with additional costs. A much higher percentage of purchases are being impacted by appraisals below contract prices. This fact has set The HVCC in the cross hairs of the National Association of Realtors. The NAR is placing their lobby dollars behind efforts to stop HVCC based on the premise that the code has lead to higher number of "faulty appraisals."

 

I am a member of the National Association of Realtors, and do agree that there are problems with "The Code," but to ask for repeal due to high frequency of "faulty appraisals" is just a poor and biased perspective. Substitute "objective" for "faulty" - that is what we are seeing now, and that is why the NAR complaints are so transparent. This I know for sure, and I have always been proud of the work product that Josephs Appraisal Group produces, our appraisals are better and more thorough now than ever before. They have to be - underwriters, bank officers and secondary market participants demand nothing less. Fifty percent of the time real estate agents are working with buyers, and should feel comfortable knowing their clients are receiving completely objective valuations.

 

Ultimately, I am not convinced The HVCC will stand the test of time. The savvy politician hesitates to support legislation that has so few beneficiaries. Consumers are paying higher fees for appraisals as management companies demand their share of the pie. These same consumers are now mandated to pay up front for appraisals that may not ultimately help them complete their refinance or purchase. In this time of terrible economic uncertainty, any legislation that leads to higher consumer fees and lower likelihood of helping strapped homeowners probably can't survive. Legislation has been introduced to place an 18 month moratorium on The HVCC. It appears clear that, if this passes, HVCC is dead. Politicians will then need to look in the mirror - the same politicians that blamed unethical appraisers for a share of the "Mortgage Meltdown," will now quietly have to admit that the unintended consequences are not worth the elimination of appraiser pressure.

 

Everyone here at JAG appreciates your continued support. I thank all that have provided us feedback on our website. I value your opinion on this commentary and your opinion on The HVCC or any other real estate or Green topics - jay@jaginc.net.

 

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Josephs Appraisal Group