There are many changes impacting borrower's home loans today. One of the most important and controversial changes is the HVCC, or the Home Valuation Code of Conduct. The HVCC arose from a legal settlement last March between Andrew Cuomo, the Attorney General of New York and Fannie Mae and Freddie Mac, and provides for new appraisal standards, effective January 1, 2010 for conventional home loans. The intent of the HVCC is to improve reliability and independence of residential property appraisals. A positive aspect of the HVCC is the provision that requires the lender to provide the borrower, at no charge, a copy of any appraisal report immediately upon completion, and no less than three days prior to the closing of the loan. The lender may require the borrower to reimburse them for the cost of the appraisal.
A pitfall of the HVCC is that the appraiser completing your appraisal may not live in or be familiar with your neighborhood or market area and may not select appropriate comparable sales or listings for your property. As a seller, it is important that your listing agent be involved in the appraisal process by meeting the appraiser at the property to provide a copy of the contract and the sales feature sheet, and relevant comparable sales from the subject neighborhood in the last 90 days or no later than 6 months. It is important that the appraisal be as accurate and complete as possible to prevent questions from the lender. Lenders are typically requiring more than three sales and also one or two listings to support the contract price, as well as sales that exceed the subject property's contract price. It is more important than ever to hire an experienced and knowledgeable agent to increase the likelihood of an acceptable appraisal and loan approval for the buyer of your home.
