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HVCC Frequently Asked Questions (FAQs)

In order to curb some undesirable effects of the residential appraisal process Fannie Mae adopted an agreement that went into effect May 1, 2009.  This article includes the frequently asked questions about the new HVCC ruling.

Is this change permanent?

In order to curb some undesirable effects of the residential appraisal process Fannie Mae adopted an agreement that went into effect May 1, 2009.  The code only applies to all single family loans, up to 4 units, that are sold to Fannie Mae.  The code does not apply to multi-family homes or to loans that are guaranteed or insured by a federal agency.  Beginning in 2010, a version of the HVCC will be adopted by FHA. Although some of the rules will be different, most will be identical to the original HVCC.

As of this moment, yes, although there are several bills in congress waiting to be heard.  Specifically, one bill that requests the HVCC rules be reversed, and another that would postpone implementation for 18 months.

Does the new code require lenders to obtain an appraisal?

No, a lender is under no obligation to obtain an appraisal. Also, the code does not specify the scope of work necessary for particular assignments.

Can appraisers still be “blacklisted”?

Yes, an appraiser can still be blacklisted if impropriety is involved, such as influencing or trying to influence appraisal outcome.  Also, the lenders are required to policies and procedures in place that can be followed that include mechanisms to report and discipline.

Can a lender still order a second appraisal?

Yes, as long as the lender is not value-shopping, or trying to influence the outcome of the appraisal.

Can an appraiser still communicate with the real estate agent?

Yes.  This is not prohibited by the HVCC.

Is the Lender required to provide the borrower with a copy of the appraisal, and what is the time frame for providing the copy? 

Yes. The lender must provide a copy, if requested, upon completion of the appraisal, but no less than three business days prior to closing. The lender can send the appraisal via email or mail.

Can the appraiser collect payment directly from the borrower? 

No. The appraiser must collect fees from the lender or a third party authorized by the lender.

Does the Code apply to AVM’s, BPO’s or tax assessments?

No, the Code applies only to appraisals.

Can a lender use a selected group of appraisers through an appraisal management company?

Yes, as long as all aspects of HVCC rules are followed.

Does the Code apply to Form 2075?  

No, Form 2075 is an inspection report. It is not an appraisal, and therefore the Code does not apply.

How does Fannie Mae audit compliance with the Code? 

Compliance with the Code will be part of the lenders’ operational review.

Is the definition of application date the actual date of the application or the date of receipt of the application by the lender? 

The application date is defined as the date the borrower(s) signed the application certifying that the information is correct.

May an appraiser use foreclosure data? 

The Code does not mention foreclosure data. It is the appraisers responsibility to decide if the information is applicable or not.

Do HVCC rules apply when trying to remove PMI?

No.  The rules only apply for a “mortgage financing transaction”.

Are there rules regulating how appraisers are chosen off an ordering list?

The lender may choose how its systems are run, as long as they abide by HVCC guidelines.

May in-house appraisers prepare appraisal reports? 

Yes, in-house appraisers may prepare appraisal reports.

Can a lender’s in house appraiser adjust the value of a loan?

Yes, this is not prohibited by the code.

May a correspondent lender use in-house appraisers? 

Yes, as long as they comply with the Code.

Can a lender dictate to a broker which AMC is to be used? 

Yes, as long as the lender has prearranged an agreement with the AMC.

May a lender accept an appraisal prepared by an appraiser that was ordered by a mortgage broker? 

No. The appraisal may not be ordered directly from the mortgage broker.

Can the broker request that the lender use specific appraisers for orders from that particular broker?

 No.

Can a broker order an appraisal from the AMC if it was authorized by the lender?

No.

Can a broker choose the appraiser from the lenders list of approved appraisers if the lender is the one to place the order?

No.

Can an appraisal be transferred from one lender to another? 

Yes, as long as it complies with the HVCC code.

Can the borrower pay the AMC for the appraisal?

Yes.  The borrower is prohibited from paying the appraiser directly.

Who is allowed to communicate with the appraiser?

Anyone who is not compensated by commission, anyone not part of the loan production staffHealth Fitness Articles, or anyone who does not report to officers or loan production staff.

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