Why is it important to get rid of the new “Home Valuation Code of Conduct” or HVCC?

Why is important to get rid of HVCC? We’ll let’s start at
the beginning shall we…? A long, long time a ago in a distant parallel universe
someone got the idea that loaning money to unqualified buyers and then
reselling the loans as investment vehicles was a great IDEA! So good in fact,
that if you could fog up a mirror and one of the three blind mice could vouch
for the properties value that you were buying than you could get a loan. And
not just any loan I mind you! I loan that is guaranteed to self destruct the minute
you walk off the closing table! But hey, this is a parallel universe were
Bankers with MBA’s and Greenspan rule all the dark forces around us. And
everyone knows that home values never go down! Crazy Talk!

Okay, fast forward to today and our reality. Our new bosses
have to now prove to the world that they are not asleep at the wheel like the
old bosses (does everyone know this song… In with the new boss… Same as the
old boss… love that song okay back to the story). So, rules started flying off
the shelves. Now you need to give fluid samples and swear a triple swear pinkie
shake before a bank will even look at you. Our new bosses also imposed new appraisal
rules just to make sure there is no funny business with home values. This
brings me to the HVCC program. Did I lose you? Are you wondering what appraisals
had to do with banks giving out bad loans and then reselling them? Fear not, so did everyone else in the Real Estate business!

So, you are probably thinking “what’s the Big Deal with strengthening appraisal rules?” I say nothing! Having one of the three blind mice vouch for
the value of a half million dollar home is probably not a good idea. However,
sending an appraiser from another county or another state to determine the
value of a home in an area that he or she is unfamiliar with is not a well thought-out
plan. And hence comes the rub. The new HVCC rules prohibit banks from directly
hiring appraisers. This means that if you are a bank and you have a qualified
applicant that has both given you fluids and promised you his first born you
must then call a third party vendor who is located somewhere around Pluto to do the appraisals.
This vendor then sends out a bid request for anyone willing to appraise your
house. The bids are granted based on…drum roll please…… LOWEST BID. Shocker
right! Now you’re probably thinking this should at least drop the cost of appraisal
right? Wrong! The average appraisal price has increased by as much as 100%. Well,
then I bet appraisal’s get done twice as fast as they used to… Wrong again, it’s
taking an average 14-20 business day to get appraisals done (Pluto is very far
away you know). I used to see appraisals get done in 3-5 days!

So, it gives my heart joy to know that our dear bosses are
thinking of scrapping the HVCC system. May I also add that if our Dear Bosses
need suggestions on how to fix our parallel universe problems that they just
pick up a phone and speak to someone that does this for a living? Those MBA Wall
Street banker guy’s are great at golf but suck at just about everything else
that happens in the Real World.