Taking into consideration the recent, final version (May 1, 2009) of the Home Valuation Code of Conduct (HVCC), which established tougher regulations for communication between appraisers and lenders/brokers, it has become fundamental to find an independent, third-party appraisal management company (AMC) which has an HVCC compliant appraisal system in place to facilitate orders correctly. Failing to do so will increase the likelihood of breaches of contract which can have catastrophic financial implications for all parties involved.
The following excerpt from the HVCC will demonstrate a few of the challenges appraisers and lenders may face:
I. Appraiser Independence Safeguards
A. An “appraiser” must be, at a minimum, licensed or certified by the state in which the property to be appraised is located.
B. No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:
(1) withholding or threatening to withhold timely payment or partial payment for an appraisal report;
(2) withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser;
(3) expressly or impliedly promising future business, promotions, or increased compensation for an appraiser…
When making your selection from out of numerous AMCs, one of the policies you will want to take a look for is if they blatantly state they are in compliance with the HVCC and are really not. More often than not, the Appraisal Management Companies website will display their HVCC compliance on their home page or their about us page.
As mentioned previously, the best decision you can make is to find an Appraisal Management Company with an HVCC compliant appraisal system already in place. Having an automated method offers appraisers additional tools for valuations and provides lenders – especially small- to medium-sized lenders – with a much simpler and cost-effect appraisal process. Additionally, most AMC’s automated systems do not require any software or program downloads, as you can create a log-in and password and save all information on their secure database.
Moreover, having access to utilize an HVCC compliant appraisal system will help to ensure quick turnarounds due to higher accuracy, full visibility during each completed checkpoint, and prompt processing and delivery of orders.
Eamon Arnett is writer and CEO of 48HN.com (http://www.48hn.com), a website featuring Appraisal Management Company.
[tags]HVCC compliant AMC[/tags]
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