I was thinking a bit about the phasing out of HVCC and how that is going to positively impact the real estate industry specifically and the economy as a whole. We sure do not need any more silly legislation that stops any of us from doing are jobs as efficiently as possible. Then I started thinking about what for sure was the central reason why HVCC was written and enacted as a rule in the first place - The Undue Pressure and "Force" applied to appraisers to get the value. This pressure caused a lot of strife, and helped to drive the whole real estate industry into the ditch. It has got to stop, for good...
Let Appraisers Be Independent
All of us - Mortgage Brokers, consumers, Realtor, Real Estate Agents, Builders, Loan Officers, Lenders, must let appraisers be independent and not unduly influenced. We have got to let these people do their jobs with confidence. Confidence in knowing there is not going to be retribution if that value is not correct. Assurance that they can give their opinion of value freely, and not be penalized because they do so in the market place by loan officers, brokers and lenders that seek their business.
I have had the privilege of working with two very fine appraisers in the last seven years. I would submit my Request for Appraisal to the appraiser. He would let me know his schedule, and would take a quick look at the comps, PRIOR to performing the appraisal. Since I have my real estate license as well, I could see a lot of the same comps that he did, so I knew what the comps looked like before I submitted my request.
But I could not see EVERYTHING that he could see. If things were going to be o.k., I did not hear from him at all, he would just perform the appraisal, and send it to me when it was completed. Sometimes it was higher than expected. Sometimes it was lower.
However - when there was a problem, a $20,000 problem - let's say, he would let me know immediately, prior to him submitting the completed appraisal to me. And I would alert the borrowers and agents that there could be a potential problem with the value and they had better start figuring out the solution right away.
Even though appraisal are opinions of value, they are based on facts. Actual market conditions. Actual comparable sales within a certain time frame. Real adjustments based on standard appraisal practices. The facts are the facts. Based on market conditions, comps and standard adjustments, the value is "X". Ever noticed how you can contact two appraisers that do not know each other and the tell you nearly the same estimate of value ? That's because it's based on factual, obtainable data that appraisers have access to...
NOW, I am not talking about fraudulent behavior. False comps, False adjustments and False opinions of value. Those people are criminals. And they belong in jail.
I am talking about an honest, open, fluid relationship between the client and the appraiser.
If we do not allow appraisers to do their jobs honestly, comfortably and with dignity, then some body is going to invent another HVCC type fiasco and set us back at least another two or three years, again...