Impact of the HVCC

The Home Valuation Code of Conduct is no doubt in full effect. Now the question is... what is going to happen? it seems that the majority of lenders and banks are not ready for the switch as most are still scambling around. We are still in talks with major lenders that are simply not ready for the switch and did not take the requirements as serious as it is.

For a lender it is a major workflow prcoess as well as a logisticaly nightmare for delivery, review and payment process. If they are doing any sort of TPO business you can just imagine where there they are.

The issue is not that it can not be done its just something that should be phased in over a months, NOT OVERNIGHT.

For us to get properly set-up with a lender and workout all the details about delivery, review, billing, reporting, and reporting standards takes about a week.Its relatively easy to do but does require some work and to get everything in the open so everyones compfortable with the new process a few days of test runs and were off to the races.

Problems occur when this is phased in overnight and the lender doesnt communicate the set-up and were kind of bootstrapping the entire process.

This causes problems with payment, scheduling, delivery and review and can delay the appraisal process several days. What usually happens is the lender finally see whats going on and steps in to have the meeting that we asked for while getting this set-up and everything smoothes over.

The Home Valuation Code of Conduct is a great step in the right direction for the industry and will bring a much needed change in the industry. Thinking back to the way things use to be,the idea of having the person who is lending the money be responsible for selecting the person valuing the collateral is common sense and should have been implemented long ago.



This is not to say that the current Mortgage Meltdown would have not still occured however, at least the intergrity of the collateral would have been assured.

So what are the best practices to work with an AMC?

1. Remember an appraisal management companies is exactly that, an appraisal management companies, there not the appraisers inspecting the property and writing up the report. There in the business of finding the best appraiser for the job and to manage the process for you. From order, inspection, review, and final delivery.

Have 150 properties throughout the nation that all need to be done in a week? Then an appraisal management company is the right move for you. A good one will be able to get all of them assigned, scheduled and delivered in 5-10 days.

2. Be proactive, the more you work with them, the more they will work with you.
As you are well aware of the appraisal process is something that is not the easiest thing in the world and anything you can do to assist the process will ensure a better delivery and a better product.

- Some tips
a. Tell the borrower someone will be calling for the management company to collect payment for the appraisal, or better yet collect the credit card information from the client and send it with the request. This alone will save at least a day or two of calling the borrower and trying to collect payment before the apprasier comes out.

b. Please enter ALL of the contacts information. Have an e-mail address? We will take it. Additional contact information? We will take it please.

c. Utilize the online portals to order the appraisal. This sounds like a no brainier but you will be surprised. A management company might process 30 - 500 orders per day and manually entering orders is tedious and very time consuming. Not to mention that orders can get easily lost and this can take several days to correct.

d. Be Patient, patience is a virtue and managing your expectations is one of the most important things for you to do. Most companies will do everything in there power to get your appraisal done as fast as possible. Sometimes there back is against the wall.


3. The more time invested in the process, the better the process. From our experience, the more time we invest in figuring out exactly what a client needs, the better the results. By nature conflicts will occur and having things worked out before hand as to what happens when the value comes in way low, or the borrower doesn't pay or the 100's of other things that may occurs is essential to enabling a working relationship. Whenever problems occur having a process in place and open communication for a resolution is crucial.

4. Remember this is not the same as your appraiser doing the appraisal, its better. The valuation of the collateral is one of the most important things in the entire process. Without an accurate valuation the integrity of the entire loan file is compromised. This will severely affect pricing on the secondary market and also affect the quality of loans sold and essentially the MBS market as a whole. An appraisal management company will ensure that no influence of value is placed on the appraisal, they will conduct an internal review of the appraisal for quality and consistency to ensure the value is not to high nor to low, but the most "probable" value. They will manage, pay and filter hundreds and even thousands of appraisers to search out and find the best appraisers for you and your business.