New Home Valuation Code of Conduct
5 May, 2009
(3) Comment
Effective May 1, a new law was put into place nationwide in the mortgage industry called the Home Value Code of Conduct. (HVCC). Whether we like it or not, from this point forward, loan originators are not allowed to have any communication with appraisers regarding the value of a property. This includes “comp checks”, purchase transactions and refinances.
All Banks, Mortgage Brokers and Mortgage Bankers are subject to this new law. When looking at properties, it will become more important than ever to properly assess the value of a property before making an offer so you don’t run into an appraisal issues. To read more about these changes, check out the details at Investment Mortgage Guy.com
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Though this will slow down the approval process, I do think this is a very good idea. Thanks for the info.
HVCC – what a joke. Yes, the new code is in affect, but as of now there is no way to enforce it. They shall create an Independent Valuation Protection Institute which includes a “telephone hotline” to receive any complaints. Give me a break! No one even knows what the # is.
This is similar to the “Chinese Wall” situation setting investment bankers apart from security broker/dealers. They could have desks next to each other but cannot communicate information. It sort of works, but I am not sure as to the intent of the regulation. Lenders have to be able to valuate properties in order to determine if the assets are sound.