[Poll] HVCC and Your Pipeline

HVCC has been in effect for almost a month now. How has it impacted your business?

I have so far received 4 appraisals back through HVCC.  All of them took at least a week longer to get. 

1.  Home appraised for 175k in 2006(all these are Texas properties keep in mind) this appraisal $112,000.  The comps used were the ones that required the least adjustments and some where a considerable distance from different school districts even though other comps available.  Killed loan.

2.  Home appraised in 2006 for 180k, this one 166k.  This one in my opinion was not a bad appraisal but it did kill the loan.

3. Client felt home worht 260k, but came in at 276k.  whoohooo.

4.  Bought home in 2002 for 250k, appraisers opinion of value now 230k.  Every comp used was a foreclosure even though there are over 20 active listiings and 20 other sales.  Only marked one of the comps as a foreclosure and the other 3 had no notation stating foreclosure.  The one correctly identified as  a foreclosure was listed in a different county than where it actually was.  Here is what an appraiser i used to use all the time had to say about this appraisal.  My question to the AMC was how didnt they catch this, did they even bother to review or just pass it along right after going to the bank?

"

It makes me fighting mad to see these type appraisals, Someone should report this guy to the State. First problem I see is he has 21 comparable properties offered for sale on page two of the URAR ranging from $204,500 to $384,990 and 26 comparable sales. How can a property be comparable at $172,000 ranging to $356,571? Comp one is a foreclosure sale from Murphy not Wylie and every other comp is a foreclosure sale. USPAP says appraisers are to use only sales that are arm's length transactions because the lender wants to know what is the fair market value... not foreclosure value for a home that sold without a Sellers Disclosure. In his additional comments he mentions only sale three as a foreclosure. Goofy, stupid stuff.

Too early to tell.  I'm working off of previously self ordered appraisals.  Should have better idea by end of June.

Out of the 6 appraisals I've had come back since the 1st of May, 4 have been "light" and 3 of the deals are dead (3 of the 4 appraisals are not legit in my opinion). Luckily I have one borrower who has additional reserves to pay the loan down to 80% LTV. Needless to say there is no recourse for these appraisers and it's cutting into my paycheck. Not happy wasting my time and losing income.

-steve

I just received my first appraisals under the HVCC.  The subdivision is new with plenty of recent comparable sales in the subdivision and with in a 3 mile radius of the subject property.   The sales contact is for $279,900 and the appraisal comes back at $279,000.    Did the 9 look like a 0? Can you say incompetent!  Not to mention my customer is paying $80 more for an appraisal. 

My company want from using Landsafe that cost $375-$450 depending on location and value - 3-5 week turn time with them.

Now we use a faster service 1-2 weeks turn time, but at a cost of $375-600 (so far, first order was $530 and the second order with them is $450).

Is the extra cost worth the faster turn time? I'm not sold on either service yet...

Already Encountering Problems Caused by the HVCC? NAMB wants to know!

NAMB has been requested by the Federal Housing Finance Agency (FHFA) to collect personal experiences from mortgage professionals or consumers of problems directly caused by the HVCC.  These problems can consist of increased costs, appraisal quality, portability issues, regulatory issues, etc. You must include specific, tangible evidence of how the HVCC has harmed your consumers and/or prevented you from conducting business.

Send an email, including your contact information, to hvcc@namb.org explaining the problem and it will be included in NAMB’s report to the FHFA.

https://www.namb.org/namb/HVCC_Resource_Center.asp

The new system:

Cost more to the consumer for the appraisal and requires a longer rate lock from the lender which cost the consumer

Takes longer to get the appraisal

Requires much more time and babysitting to make sure the communication is being followed

Takes longer to speak with a representative at the AMC

More parts more people more problems more errors

Less communication

2 problems encountered by one of my colleagues:

1. Appraisal ordered thru AMC and credit card is charged within hours of the order being placed.  9 days later, the customer has not received a call to set up a time for the inspection, despite being charged.  The customer got fed up, is disputing the charge (rightfully so, as he was charged and no services were rendered), and the customer is going elsewhere for his loan.
2. Appraisal ordered through AMC for a purchase set to close 5/15.  Communication from the AMC states that the appraisal inspection will be 5/21.  Anyone see a problem? 

If you are frustrated with HVCC, sign and forward this petition:

www.hvccpetition.com

Tim

Petition signed. Thanks for the post!

The HVCC has slowed the process considerably and is completely inefficient and costly. And, yes, it has killed deals for my clients and me.

Tim,

I'd suggest putting the link on a separate post, I think more folks would see it / sign it!

I am confused by the number that say that the hvcc is a minor inconvenience.  It appears that all of the comments so far are negative.  This process is going to cause huge problems for consumers in what is already an overly restrictive lending environment.  The biggest issues that we have had so far are:

a)  There is not much chance of recourse if you feel that an appraisal is low or of poor quality.  Ex.  My borrower's neighbor had an appsl come in at 549k and her house came in at 420k.  My borrowers house is about 200 feet larger, same age, same builder, same quality, same everything, just bigger.  My borrower pulled comps that validated a per sq. ft value of $152 and sent the comps to the appraiser.  The response, a week later and thru the appraisal service company was this :  "we feel that the comps provided by the borrower are not suitable comps and would not support a higher value." The comps were all in the same neighborhood, sold within the last 6 months and built by the same builder"  So, based on this response, it tells me that the appraiser has no interest in analyzing objective data that perhaps they might have missed on the first inspection, rather they are more motivated to not change the original estimate so they continue to get requests from the appraisal services company.  So, now my borrower is out $475 on this appraisal.  She knows the value is there and now has to decide whether to spend another $475 to go with another lender and hope she draws a competent appraiser.  Her current rate is 6.75% and I had her locked at 4.75% and now she has lost this rate because of a poor appraiser. This process is seriously flawed and downright unfair to the consumer.

b) turn times.  We have had one of our 8 appraisals come back within two weeks.  The others have taken 10 business days or more.  From the date that we initially placed the request until we actually recieved the inspection, it has taken two weeks on all but on of our appraisals. 

c) cost:  The average appraisal cost to the consumer for the last 10 years in our area has been $300.  Now that average has moved to $400.  And coupled with the deterioration of quality, the cost/benefit ratio is at the lowest level in the last 10 years.

I could go on and on but those are the three biggest issues right now.

Petition signed

What type of checks and balances do the AMC’s have in place?  Do they check the work that the appraisers they hire turn out?  Did they test market this before forced this on the whole nation?  This is another example of our government passing laws for industries they do not understand.  Where was the National Association of Realtors when this horrible law was being considered?  I can tell you the Realtors are now seeing what this means to their business and are not very happy. 

I just got an email from one of my wholesalers saying that the AMC should send another appraiser out to do the job right and pick up the cost of the second appraisal. Long story short: the original appraisal was one of the worst I have ever seen. AMC totally agrees with my value dispute but the appraiser refuses to repsond. AMC is going to cut off the appraiser because of incompetance but I'm still stuck with a worthless appraisal.  

Problem: Appraisal ordered through lender website. Appraisal is terrible and worthless. Borrower is out $375 and a rate lock of 4.75% saving $300/mo.

Solution: None

The reason for such incompetant appraisals is that when the AMC receives a request for appraisal, the cost of the appraisal is set in advance.  The AMC will than send a request to multiple appraisers asking when they can do the appraisal and what will they charge.  Let's say the cost is $400

1.  First appraiser says next tuesday and charge $250

2. second app. says next tuesday and $220

3. third app. says next friday and $180

which appraiser do you think gets the bid. Since the amc charged 400 they make more money with number 3.  Like any business they want to maximize profit and good customer service is not needed since we have no choice in who does the appraisal.

I asked the appraisal review manager at Flagstar if they knew the amc were searching out the low cost appraiser and i was told they dont believe they are doing this.  I than asked her if the AMC provides to the lender how much money they paid the appraiser and i was informed that the AMC do not want to give that information, i wonder why?

Where is the regulation for these AMC's?

I wonder how much longer until I can google the word "appraisal" and get back a 10,000 sites and the first twenty are like ripoffreport.com?!