HR 3044: To Impose 18-month Moratorium on HVCC

Finally a litte ray of sunshine the Home Valuation Code of Conduct (HVCC) initiated by New York Attorney General Andrew Cuomo that has done nothing but decrease the appraiser’s income up to 40% while lining the pockets of these new Appraisal Management Companies (AMC).  AMC’s are charging $75 to $100 more for an appraisal while only paying the appraiser doing the appraisal $200 or less for their work they used to make $350 for.  I had an appraiser friend recently tell me he received a call from an AMC he is signed-up recently trying to negotiate him doing an appraisal for only $75 if he wanted the work.

In my experience most AMC’s are simply larger appraisal firms that re-designated themselves “Management Companies” and are not giving work to appraisers outside their own employees.

Because of HVCC is it is taking on the average of two weeks to get an appraisal done that used to be done in three business days.  At least that is my experiences with AMC’s in the past two months.  Another huge disadvantage of HVCC and AMC’s is that it’s not only increased the cost to the borrower of an appraisal, it now has to be paid for before the appraisal is done.  In the past the appraiser would bill the loan officer Net 30 and he’d be paid from the proceeds of the closed loan, thus the borrower didn’t have to pay in cash or credit card the cost of the appraisal.  That is no longer the case, which for some on fixed incomes makes refinancing almost an impossibility unless they have the extra cash lying around.

Hopefully our elected officials will see that HVCC has no tangible benefit to the borrower, and in fact harms the borrower.  What sounded good in theory is not good in practice.

Announcement from the National Association of Mortgage Brokers

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