New Appraisal Rules are Causing Problems
by Bob Hunt - Tue, Aug 18, 2009—Like politics, all real estate is local. This is drummed into us time and time again. You hardly ever see a report about state or national real estate trends without the cautionary caveat that “local markets are all different.” So how, then, does it make any sense for real estate appraisals to be conducted by out-of-the-area appraisers who lack (and don’t have time to get) specific local-market knowledge?
Well, it doesn’t, of course; but the practice has become commonplace thanks to the recent adoption of the Home Valuation Code of Conduct (HVCC). The HVCC is not a result of legislation. Rather, it is the result of an agreement, a settlement, entered into by Fannie Mae, Freddie Mac, and the office of the New York State Attorney General. The agreement went into effect May 1, 2009. Its aim was to put an end to corrupt practices in the business of appraising residential properties. Perhaps, to some degree, it has achieved its aim; but what we know for sure is that it has caused a lot of problems so far.
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