Bay County Market Comments for Lynn Haven, Panama City, Panama City Beach

The Home Valuation Code of Conduct

As of May 1, 2009, big changes in the lending industry relating to appraisal ordering were implemented as a result of an agreement developed by the New York Attorney General’s office.

Currently, the HVCC is pushing a lot of hot buttons on all sides of the aisle. This would include appraisers, real estate agents, and lenders that are involved in the process.

An article in the New York Times today reports:

Putting appraisals completely in the hands of lenders may sound like a good idea in principle, because it is supposed to be lenders who are putting their money at risk in a home loan.

But the reality is that many companies that write home loans these days do not have much incentive to worry about the accuracy of appraisals. That is because the companies do not keep the loans on their own books, instead selling them to Fannie Mae or Freddie Mac.

The honest appraisers saw that the situation was helping to drive housing prices beyond reason. A petition they started a decade ago, just as the long boom was getting under way, warned of “the potential for great financial loss” to the economy if the penalties for pressuring appraisers were not enforced. The petition also complained that honest appraisers were being blacklisted.

The full New York Times article can be found here: