KGE Real Estate

I received the email below on a comment on my previous Home Valuation Code of Conduct. I felt that Dana made some good points and decided to create a specific post of its own.

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Home Valuation Code of Conduct must be stopped!!

Customers file goes to lender A for underwriting customer now pays at least $100.00 more than before for an appraisal. Lender A denies the loan or happens to pull back on pricing (loan was floating exp) and is not as competitive as Lender B. Lender A MAY agree to release the appraisal to Lender B how ever Lender B will not accept Lender A appraisal due to warranties is has with its investors. Consumer now may need to pay an additional $400.00 for a new appraisal. Customer snaps..

The above issue just came into play with a consumer. A perfectly clean loan file was submitted to

a Lender A for an approval. 30 Year Fixed Refi conforming loan. Customer paid $300.00 for an appraisal

Lender A denies the loan for the following reason(s):

Unacceptable Appraisal/Collateral: Insufficient collateral value- URAR does not support valuation.

Note: No explanation of the particulars or a counter offer on what Lender assumes the value to be.

Note: The appraisal is very detailed and has 9 comps to support the value.

Now Mr. Consumer as of 5/1/2009 and some Lenders as of 4-19-09 Will be subject to the ruling of HVCC or Home Valuation Code of Conduct

Note:

The Home Valuation Code of Conduct (the Code) is the result of a joint agreement between Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General to enhance the independence and accuracy of the appraisal process, and provide added protections for homebuyers, mortgage investors and the housing market.

Continuing story:

Now in the example as noted above. Realistically instead of Mr/Mrs Consumer paying exp $300.00 for an appraisal the fee may be $400.00 or $500.00 for a single family. Keep in mind now with the HVCC a middle man is involved known as a AMC Appraisal Management Company. Instead of a independent appraiser (small business owner) making exp $300.00 for the appraisal the AMC will keep a portion of the appraisal monies and pay the appraiser less than what he or she was making before. Another words the middle man AMC Appraisal Management Company keep the majority of the monies that the CUSTOMER who paid for the appraisal and the actual appraiser (small business owner) who is doing all the work will now be making substantially less money than before.

Now in following with the above scenario Mr/Mrs Consumer wants to pursue there mortgage application with another Lender. PROBLEM** With the HVCC as noted Lender A MAY transfer the original appraiser over to Lender B HOWEVER Lender B WILL NOT accept the original appraisal. Mr/Mrs Consumer will now need to pay an additional $400.00 or $500.00 for a new appraisal to start the process all over again.

So now the cost of doing mortgage application goes from 300.00 current model to $400.00/$500.00 with the HVCC Ruling. NO BUT WAIT.. In this example the Consumer would pay 2x $400.00/$500.00 to proceed with the mortgage application. Before HVCC consumer cost $300.00 After HVCC $800.00/$1,000.00 A NIGHTMARE WAITING TO HAPPEN!

Now a Large conglomerate AMC – Appraisal Management Company is in the picture and Mr/Mrs (small business owner) appraiser is making less $$ that they were making in the past.

Who are some of the appraisal management companies. Mr/Mrs consumer you need to see the following link from Diana Olick CNBC – http://www.cnbc.com/id/29619999

Mr/Mrs Consumer you must take action ASAP to defeate HVCC HOME VALUATION CODE OF CONDUCT.

Signed,

Dana Bain

Premiere Mortgage Services Inc.

http://www.BainMortgage.com