""National Association of Realtors"":http://www.realtor.org (NAR) President Charles McMillan is calling for Fannie Mae and Freddie Mac to delay the new Home Valuation Code of Conduct (HVCC), which is scheduled to take effect May 1, 2009.
McMillan sent a letter to ""Fannie Mae"":http://www.realtor.org/wps/wcm/connect/b79bfd004dd40b4f8919ade06077afc4/Williams+Fannie+Mae+HVCC+Delay+04202009.pdfxMOD=AJPERES&CACHEID=b79bfd004dd40b4f8919ade06077afc4 President and CEO Michael Williams and ""Freddie Mac"":http://www.realtor.org/wps/wcm/connect/239710804dd4088588d5ade06077afc4/Koskinen+Freddie+Mac+HVCC+Delay+04202009.pdfxMOD=AJPERES&CACHEID=239710804dd4088588d5ade06077afc4 Interim President and CEO John Koskinen requesting that HVCC be put off for at least another year, until May 1, 2010. Citing a number of reasons, McMillan said the delay is necessary to give stakeholders across the country time to prepare for changes to the appraisal process brought about by the new guidelines.
Some of NAR's concerns include a lack of guidance from the GSEs and their regulator since the final agreement was announced in late December 2008. NAR also noted that it is not clear who will be responsible for enforcement of the code and that many state laws governing the third-party appraisal management companies (AMCs) involved have not yet been finalized. The association also pointed out that the Independent Valuation Protection Institute (IVPI) is not yet operational. IVPI was announced as part of the HVCC to receive complaints from appraisers and users of appraisal services regarding improper influence in the process.
In addition, the sale of Federal Housing Administration (FHA), Veterans Administration (VA), and Federal Home Loan Bank mortgages are excluded from HVCC. NAR is worried that this deviation in policy may be difficult for lenders and appraisers to navigate, particularly since FHA now commands 30 percent of the home loan market share.
McMillan also sent copies of his letter to the GSEs' regulator, the Federal Housing Finance Agency (FHFA), and New York State Attorney General Andrew Cuomo.
The implementation of HVCC is part of an agreement reached between the GSEs and Cuomo to bolster appraiser independence and ensure the accuracy of the appraisal process, which has come under attack as an area of lender abuse. Under the new Code of Conduct, effective May 1, Fannie Mae and Freddie Mac will no longer purchase mortgages from sellers whose appraisal reports do not comply with HVCC.