Misinformation creates HVCC confusion

Michelle Bradley

Confused about the Home Valuation Code of Conduct (HVCC)? You’re not alone.

Many REALTORS® think HVCC only affects appraisers but that’s not the case, according to Michelle Czekalski Bradley, PA Certified General Appraiser with Czekalski Real Estate Appraisal.  HVCC has an effect on everyone across the industry, including REALTORS® because they’re part of the transaction.

Previously a REALTOR® could act as an intermediary and engage the appraiser in order to expedite the sale. This is no longer permitted under HVCC. The HVCC specifically states, “a lender will not accept any appraisal report completed by an appraiser selected, retained or compensated” by a third party, which includes real estate agents. Bradley also says REALTORS® need to remember that  the HVCC only applies to secondary market loans in which Fannie Mae and Freddie Mac are going to purchase the loans or if FHA loans are involved.

“There’s a lot of misinformation about HVCC and it’s caused a lot of confusion,” Bradley added.

For example, many REALTORS® believe they can no longer talk to appraisers due to the HVCC. “That’s not the case,” Bradley explained. “A REALTOR® can still call an appraiser to ask for clarification about a needed repair.”

But a REALTOR® can’t call the appraiser and recommend he overlook the needed repairs or say they’re done when they aren’t. Bradley said, “You can’t threaten the appraiser. For example, you can’t tell the appraiser that you won’t hire him again if he doesn’t do what you’ve told him. That’s a violation of the HVCC.”

The National Association of REALTORS® (NAR) has been tracking the changes the industry has seen since the HVCC went into effect in May. In a survey, REALTORS® reported:

• Increased time in getting appraisals
• Use of out-of-area appraisers
• Consumers paying more for appraisals
• No control over who completes the appraisal.

To learn more about what every REALTOR® should know about HVCC,  attend Bradley’s presentation titled “How Your Closing is Affected by the New Appraisal Regulations,” at Triple Play in Atlantic City on December 9.