The Reality of the HVCC
Since the first draft of the proposed HVCC, the Mortgage Lending Community has had trouble grasping the staggering changes headed their way. Overall industry response to the Home Valuation Code of Conduct (HVCC) has been a simple wait and see attitude. A few of the typical responses to the HVCC have been;
We do not believe the HVCC will become a reality. We will not make any alterations to our business processes until the Code actually goes into effect.
Approaching industry or regulatory driven process changes in a proactive rather than reactive manner allows organizations to stay ahead of their competitors. At a bear minimum, your organization should establish itself in a position to be compliant with the Code when it is implemented. Utilizing our web based system, Appraisal Logistic Solutions can easily help your company structure its appraisal ordering process to ensure full compliance with the HVCC prior to the May 1st, 2009 deadline. Having your internal processes organized and Loan Production Staff trained will make the immediate transition to HVCC compliance seamless. This will save you from the headaches and liabilities associated with operating your organization in noncompliance.
We have an internal remedy to the HVCC. An employee will be responsible for ordering all of the appraisals for our organization.
Complying with HVCC internally involves maintaining employees that are isolated from Loan Production Staff. Those employees will be tasked with the formidable job of;
• Managing a network of appraisers.
• Ensuring all the appraiser’s credentials and licenses are up to date
• Keeping track of each appraiser’s coverage area, license level, contact information, and work load capacity
• Continuously e-mailing and phoning appraisers to obtain status updates on each and every appraisal
• Keeping current with any new mandated regulations to ensure compliance
• Making certain no Loan Production Staff is attempting to influence the appraiser
Additionally, it will be necessary to purchase and maintain a secure database software system capable of handling the appraisal volume, loan file security, and the distribution of information essential to maintaining efficiency. This will place a heavy burden on your staff, as well as your bottom line. This is a costly venture even for a high volume operation, as evidenced by the many large national lenders who have already taken steps to utilize the services of an Appraisal Management Company. Our solution does not affect you balance sheet. The service is cost free to the client.
We do not want to loose the relationships that we have with our Appraisers. They provide great service. They have the credentials and ethics that we look for in a qualified Appraiser.
ALS will use your current approved appraiser list. We do not blend in or insist that you use our network of appraisers for your assignments. We respect the business relationships that you have in place. Our system is designed to be logical and efficient.
Our Lenders / Wholesalers informed us that all we have to do is certify that we are in compliance with the HVCC.
The HVCC is not to be taken lightly. The Code is very specific and to the point. Federal and State authorities are in the process of adopting the Code as law. Noncompliance with the Code may be viewed as a breach of your state lender license and could affect your eligibility to sell loans to the Enterprise if you fail to remediate. We encourage all lenders that we meet with to carefully review the consequences of noncompliance with an attorney. With ALS, we will provide you with an HVCC / IVPI Compliance Certificate attached to every appraisal report ordered through our system.
The reality of the HVCC is that compliance is not simple at all. As a mortgage provider originating Fannie Mae and/or Freddie Mac loans, your organization must agree to the following representations and warranties;
Representations and Warranties
“A lender shall certify, warrant, and represent that the appraisal report was obtained in a manner in compliance with this Code of Conduct. If the Enterprise determines, on its own or from a referral made by the Independent Valuation Protection Institute, that a lender is in breach of a material aspect of this Code of Conduct or in violation of a provision of the Code by a complaint referred from the Institute, the Enterprise will enforce all applicable rights and remedies, including suspension or termination of the lender’s eligibility to sell loans to the Enterprise, if the lender fails to remediate.”
Appraisal Logistic Solutions is your solution to the immediate challenge at hand. As a mortgage originator, continuing to operate your business while discounting the HVCC may jeopardize your ability to remain competitive in today’s marketplace. As many national and regional lenders have come to realize, the HVCC will have a direct impact on the way lenders must conduct their business. Many lenders that have taken the necessary steps to adopt the controls outlined in the HVCC. They are implementing these steps regardless of any compliance driven date of acceptance. They are paving their way to ensure a solid future in the residential lending industry while reassuring their stockholders, owners and customers of the quality of the loans they are undertaking.
Appraisal Logistic Solutions has the appraisal and lender industry expertise to administer your appraisal management processes efficiently and straight forward. In working with Appraisal Logistic Solutions, you will be in full compliance with the HVCC / IVPI while helping to bring the integrity of the valuation process back into the industry.
