As we head into an improving real estate market Fannie Mae and Freddie Mac (now for all practical purposes government owned) have thrown down a new set of appraisal regulations that are bound to not only create delays but also additional expenses to all because of a new law, HVCC (The Home Valuation Code of Conduct).  Lenders are now required to use a third party Appraisal Management Company that oversees the appraisal and all communication.    On the surface it may seem like a sound decision although it has some built in problems that may end up being very costly to buyers and sellers. 

Let’s look at a few of these problems:

1. The appraisal is now captive to the lending source and cannot be transferred.*
2. The new law requires the use of Appraisal Management Companies **
3. In some cases appraisals will be assigned on a first come first serve basis with no regards to professionalism expertise or market knowledge.
4. Valuations may not be accurate due to lack of market knowledge or in some case due to lack of market information and local statistics.
5. Lenders and Brokers are now prohibited from any communication with the appraiser, eliminating the ability to communicate relevant information that the appraiser may not be aware of.
6. If there are questions or rebuttals the process is long and inefficient, causing delays and expense to both buyers and sellers.

If there ever was a time when you needed to rely on your lender you know how important it was to have a professional and experienced one working for you.  If you need an experienced, professional and honest lender we will be glad to provide a list for you.  We work with them every day and we know who the good ones are.

For all of your Victorville CA Real Estate needs: visit our web site at http://www.HomesOfVictorville.com

*  If the buyer’s lender does not properly qualify the buyer, or if the lender throws down a new guideline prior to final loan approval that disqualifies the buyer for the current loan package the entire appraisal process may  need to be repeated and paid for a second time and likely creating substantial delays in the escrow.  Previously, if either of the above where to happen the lender could repackage the loan and appraisal then forward it to a new investor with a minimum of delay.

** The new law requires a rotation of appraisers and quite often from out of the area (clueless appraisal management companies located thousands of miles away) most appraisers are professional and well seasoned prior to receiving their license.  Yet, the point needs to be made that appraisals are not scientific in origin but simply “an opinion of value” given a specific set of comparatives.  An out of area appraiser may lack basic knowledge or market statistics that could substantially affect the value.  We have already had first hand experienced with inaccurate appraisals from out of area appraisers.

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