LoanCentral's Real Estate Lending Blog

If you are in any segment of the Mortgage or Real Estate industry, please take a moment to read and sign this petition. This is the message I sent out to my sphere of influence here in the Seattle area.

Dear Fellow Agents and Loan Officers,

The new appraisal HVCC rule is now in effect for all FNMA and FHLMC loans and the speculation that it would lower service levels, delay loans and be more expensive to the consumer is proving to be true. I’m writing you to ask that you follow this link (www.hvccpetition.com ) and electronically sign this petition to repeal the new HVCC law.

It all started with a BANK (wamu) in New York, pressuring appraisers at Appraisal Management Companies (AMC's) to come in at value. There is and has been a process in place for appraisers to deal with these types of issues - we can clarify or adjust the current self-regulation – we don’t need new legislation.

Let me start by stating that this is NOT an Appraisal problem, it's an APPRAISER issue. Regulating the entire industry at a higher cost to the consumer is not a better answer than dealing with the "Few" appraisers or lenders who are not ethical and/or following the current rules. HVCC has created an environment where inexperienced appraisers are completing substandard work with a middle man (AMC's) adding no value to the process. The entire HVCC process results in poor service, poor appraisals and slower turn times for the consumer.

Interestingly enough, WAMU was a lender who was charged with a RESPA violation by negotiating lower credit reporting costs with national credit agencies because of their economies of scale - but did not pass on the lower costs to the consumer… I truly believe we are on the edge of what would be called a RESPA violation for lack of value added services the AMC's are being paid for.

In addition to poor quality work, there is a lack of communication from the AMC's and slower turn times for getting the appraisal back to be underwritten. This creates the need for longer lock periods and lock extensions which are again more expensive to the customer. (Example - A $417,000 conforming loan that needs a 1/4% lock extension or 15 more days to process due to the appraisal - costs the consumer an additional $ 1,042.50.)

Another issue that has surfaced is multiple appraisals being required if one lender cannot approve a transaction, or if the lenders pricing goes "out of the market" and the consumer goes to a different lender and HVCC requires another appraisal to be completed. (Artificially increasing rates above market is a common practice lenders use to temporarily slow things down when their processing and underwriting pipelines hit capacity.)

The mortgage industry is experiencing all of the above issues as a direct result of implementing the new HVCC at the cost to the consumer and economic recovery of the housing markets throughout the nation. Please take a moment to sign the petition to repeal this law and its unintended consequences.

Follow this link to sign the petition- just do it ! www.hvccpetition.com

Regards,

George Charles
President \ Designated Broker
LoanCentral