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What is HVCC all about for the Consumer? Get the Full Picture

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By : Rose B    99 or more times read
The Home Valuation Code of Conduct or preferably known as HVCC is a brand-new outline of rules and regulations in connection to mortgage lending and appraisals of real estate properties. The aim of HVCC is to protect and prevent pressure when it comes to appraisers to create an intended value of property. Eventually, these rules are intended to safeguard all consumers even though there are some consequences pertaining to the HVCC. Freddie Mac or Fannie Mae back up the compliance needed for loans.

The HVCC all started from an agreement set forth by New York State Attorney General, OFHEO, Freddie Mac and Fannie Mae. The New York State Attorney General Andrew Cuomo charged legal action against First American Corporation and eAppraiseIT, its appraisal subsidiary during the 2007 appraisal turmoil. Cuomo accused the company of allowing Washington Mutual to force and intimidate appraisers to fix the values and unfairly picking out the appraisers who will be used for Washington Mutualís appraisal reports.

Indeed, from this experience rose an agreement in which to protect appraisers from such doings. It surely affects any body who has applied for mortgage and even mortgage lenders and this agreement was taken into full effect starting May 1, 2009. It appears that the HVCC is a good consumer protection rule since neither a mortgage lender nor broker can choose an appraiser nor have any personal talks concerning other agendas with the chosen appraiser.

Under the HVCC, the actual appraisal reports will not have any modifications as the law ensures to bring accurate and reliable valuations in its appraisal reports. Somehow, the HVCC maintains the core value of what an appraiser is and should be. Everything in regards to mortgages and appraisals should be in compliance with the HVCC.

However, there is a change in the process of authorizing appraisals. Individuals and businesses such as home owners in need of home appraisals, a lawyer requiring property appraisals or a company employee communicating directly with appraisers will also benefit from the rules set by the HVCC.

The HVCC particularly forbids people involved in appraisals from recommending, influencing, coercing, or pressuring appraisers in any way shape or form to generate a specific value for a property. In this case, only a lender specified can order an appraisal which will be backed by Freddie Mac or Fannie Mae. Without lender permission, real estate agents and mortgage brokers are prohibited to order appraisals or engage appraisers. In addition, lenders are required to furnish copies of appraisal reports to the borrower within three days prior to closing. An appraiser will not provide the copy but the lender at no extra costs. This way, it enables home buyers to review the report and choose to whether proceed with the purchase.

Furthermore, persons who are paid on commission are prohibited to engage appraisers or have any upfront communication with them. There is a particular exception to the rule however. Some small institutions are exempted since due to limited staff and size, they would be quite incapable to establish total independence concerning appraisals and mortgages.
The HVCC is set upon the protection of appraisers given for lending purposes. Click on Florence AZ Short Sale Realty, Eloy Luxury Homes and Gated Leisure World Properties to get the full gist about the HVCC and other related information.

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