June 22nd, 2010 4:57 PM by Dana Bain
Mortgage brokers and Realtors are joining forces to persuade lawmakers who are currently reconciling the two versions of financial regulatory reform legislation into one bill to add language that would kill the Home Valuation Code of Conduct.
Mortgage brokers and Realtors have united in a last-ditch effort to get the controversial Home Valuation Code of Conduct (HVCC) killed off as part of the larger financial regulatory reform legislation that is currently being debated by lawmakers in Congress.
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A joint House-Senate committee chaired by Rep. Barney Frank, D-Mass., was tasked with reconciling the two versions of the legislation, SB 3217 and HR 4173. The House version called for the termination of the HVCC and contained provisions that would overhaul the regulatory process for appraisals, including requiring the registration of appraisal management companies (AMCs) and giving more funding for federal and state appraiser regulators accountable for oversight and enforcement of existing appraisal rules.
SB 3217, however, contained no such provisions. It is hoped that the final reconciled version of the two bills, due on PresidentObama’s desk by the July 4 holiday, will contain the original appraisal provisions.
Reports indicated that mortgage provisions would be debated on June 22 and that Realtors and mortgage brokers are especially interested in seeing the HVCC killed off.Realtors and mortgage brokers have argued against the code ever since its introduction in May 2009, saying it has led to lower quality appraisals and the use of inexperienced and unqualified appraisers. National Association of Mortgage Brokers CEO Roy DeLoach told the newspaper that the HVCC is causing more harm than good. “It’s basically hollowing out the equity in communities whether you intend to sell or not,” he said.
Independent appraisers have also been opposed to the code, which resulted in the significant uptake in use of AMCs and what they see as massive downward pressure on appraisal fees as companies seek to compete with low price points.
However, mortgage lenders, many of which fully own or have significant stakes in AMCs, oppose the effort to alter the rules. John Courson, the Mortgage Bankers Association’s president and chief executive officer, is quoted as saying “We’re going to try all we can to keep it out.”
Most groups on both sides of the debate are in favor of retaining some kind of appraiser independence, including possibly retaining the ‘blind’ ordering of appraisals.