What is HVCC and what is the purpose of the HVCC?
Enacted May 1, 2009, the Home Valuation Code of Conduct (HVCC) is a set of rules for the mortgage lending and real estate appraisal industries. The purpose of the HVCC is to protect appraiser independence and prevent lender or borrower pressure from being applied to appraisers to produce a desired property value. Ultimately, these safeguards will contribute to protecting consumers. Even though there has been considerable debate about the unintended consequences of the HVCC, compliance is required for all loans backed by Fannie Mae or Freddie Mac. Appraisal Source, Inc. has embraced the HVCC because we believe we compare favorably to other appraisal firms in terms of experience and professional designation.
Has the Appraisal Report or Appraisal Process changed because of the HVCC?
No. Our reports are the same. Appraisal Source, Inc. has aways focused on ensuring accurate, independent valuations in our appraisal reports. It's one of the core value of our business. Appraisal Source, Inc. will continue to provide unbiased appraisals going forward and we're ready and qualified to make sure everything we do complies with the HVCC.
HVCC has changed the process of ordering appraisals. If you're a homeowner in need of an appraisal of your home, an attorney needing a property appraisal, or even if you work for a small community bank or credit union and will continue to communicate directly with appraisers, click here to order an appraisal now.
Where did the HVCC come from?
The HVCC was born from an agreement between the New York State Attorney General, OFHEO, Fannie Mae and Freddie Mac. In 2007 New York Attorney General Andrew Cuomo filed suit against First American Corporation and its appraisal management subsidiary, eAppraiseIT, accusing them of enabling Washington Mutual to pressure appraisers to change values, as well as hand-pick which appraisers should be used for WaMu's appraisal reports.
Attorney General Cuomo then subpoenaed Fannie and Freddie in order to learn more about loans purchased from banks like WaMu and the valuation processes they used. One of the results of the investigation was the HVCC, which was agreed upon and approved by Fannie and Freddie. From May 1, 2009 forward, every loan eventually funded by Fannie and Freddie must be in compliance with the HVCC.
What are the specifics of the HVCC?
You can read the full HVCC on Freddie Mac's website by clicking here: https://www.freddiemac.com/singlefamily/pdf/122308_valuationcodeofconduct.pdf