As of May 1, the Federal Housing Finance Agency has mandated that loan officers can’t select or pay appraisers. The Home Value Code of Conduct (HVCC), as it’s called, is intended to remove conflicts of interest some feel are inherent in the loan officer/appraiser relationship.
In the coming months, industry-wide HVCC implementation means appraisals and perhaps escrow periods may take longer. Instead of the current practice of a loan officer ordering directly from appraiser, the basic HVCC model is that a bank has a stable of appraisers, a loan officer submits an appraisal order, and any appraiser in the stable will be randomly assigned to the order. Banks can choose their own appraisers and set standards for things like experience level and turn-times, but FHFA (using Fannie & Freddie) has to approve each bank’s entire appraisal process.
Banks will either have internal appraisal divisions or be contracted with appraisal management companies.
No word on how our local banks’ stables currently stack up.
∙ Fannie And Freddie Forced Aim To Help Fix Appraisal Fraud [SocketSite]