| The HVCC or Home Valuation Code of Conduct was | | | | There doesn't seem to be any fee management and |
| recently implemented by Fannie Mae and Freddie Mac | | | | the costs for appraisals have increased dramatically. |
| as a new system of appraisals in the U.S. Under the | | | | As reported by the National Association of Mortgage |
| rules, many of the appraisals are handled by | | | | Brokers, one lender, EverBank, advertised its fees as |
| management companies (some of which are also | | | | follows: $465 for GHA appraisals and $390 for |
| owned by the lenders themselves). The system is | | | | standard single family appraisals. Flat fees in Hawaii |
| designed to reduce fraud and lower costs with an | | | | are a hefty $700. |
| improved appraisal. | | | | The new system is being extended to FHA |
| This new system has numerous flaws and has been | | | | mortgages, even though they are not included under |
| widely criticized from both the Appraisal Institute (which | | | | the new code of rules. |
| represents over 20,000 appraisers nationwide), and the | | | | This new regulation increases the overall closing time |
| National Association of Realtors. | | | | and the waiting time before the customer can receive |
| Some of the major criticisms include: | | | | funds. |
| Homeowners don't choose who they want to | | | | Appraisal portability is also decreased since each |
| complete the appraisal of their home or how they | | | | lender will require a new appraisal. |
| calculate the value. The appraisal management | | | | Small business appraisers will be squeezed out even |
| companies are actually unregulated and the quality of | | | | though they may have a better knowledge of the |
| their appraisals may be inferior to those of an | | | | area and may be considerably more qualified than the |
| established professional appraiser. | | | | employees of the designated unregulated appraisal |
| The costs are actually increased since the appraisal | | | | management company. This removes competition and |
| management companies charge extra for their role. | | | | equitable pricing guidelines for the consumer. The larger |
| Typically, an appraiser charges approximately $325, | | | | management companies will distribute orders through a |
| but when consigned by the management company | | | | central area which may be located hundreds of miles |
| they only receive about $200. The customer is | | | | from the property being appraised. The chances of |
| charged $400 and must pay up front for the appraisal | | | | the consumer of receiving a below standard appraisal |
| instead of during closing. If the deal doesn't go through, | | | | by employees who are not familiar with the area are |
| the consumer absorbs the cost and the management | | | | increased. |
| company still pockets the extra charge. | | | | |