Appraisers
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Lenders
Important links to the HVCC:
What the HVCC Means to You?
While there are many aspects of the HVCC that will effect your business, we have summarized the most drastic changes and its effects below.
P.S...don’t worry, InHouse Solutions already has the solutions required, and with little change to your business model too!
Change #1 - Appraiser Engagement
No third-party (including brokers and real estate agents) can select, retain or compensate appraisers. Further, the lenders production staff cannot do the same as well.
Effects: The full management of the appraisal process and appraisers is now the lenders responsibility.
Change #2 - Improper Influence on Appraisers
No person(s) or entity can request or imply to the appraiser an estimated value, pre-determined value, desired value, target loan amount and loan-to-value (or any other number to infer any value) at anytime prior to the completion of the appraisal.
Effects: In other words there are no “comp checks”, “pencil searches”, “pre-comps”, value range, no borrowers estimated value, no lender estimated value, no proposed loan amount, etc…
Change #3 - Additional Appraisals
No person(s) or entity can order, obtain, use or pay for a second or subsequent appraisal or autoamted valuation model unless there is written just cause.
Effects: In other words, unless there is significant justification, the first appraisal completed is the final word. One loan = one appraisal.
Change #4 - Borrower Receipt of Appraisal
A borrower must be delivered a copy of an appraisal report, at no additional charge, upon completion and no later than 3 days prior to the close date.
Effects: If you close your loan without delivering a copy of the appraisal report, you are violating the HVCC.
Change #5 - Appraisal Quality Control Testing
Lenders must agree to Control Test valuations (including appraisals, AVMs, BPOs and desktops) from a randomly selected significant portion of all loans sold to both Fannie Mae and Freddie Mac and report those findings.
Effects: Increased review processes of both quality and compliance to the HVCC.
Change #6 - Representation and Warranties
Lenders now must rep and warrant the actions of appraisers, appraisals and the appraisal process.
Effects: Increased risk.