There is a storm on the horizon that is seriously going to HURT our economy. The new Appraiser rules HVCC (Home Valuation Code of Conduct) being imposed are likely going to cause further harm to our economy. Though the concept sounds reasonable – i.e. removing the ability for Loan Originators or Real Estate Agents to choose the appraiser, the effect will be disasterous. The new rules support undervaluing homes simply because an appraiser is chosen by the lender. If the lender chooses an appraiser that provides a consistently lesser value, they win because their asset is worth more than the appraiser indicated. Hence the Lender has less risk.
It is assumed that the evil Loan Originators and Real Estate Agents were able to influence the appraiser into providing over inflated values, however, do you really believe the Lenders are more ethical or that for some reason they do not have a vested interest in getting lower valuations? Give me a break. We’ve seen what the big lenders are capable of doing. That is why according to www.ml-implode.com, 342 lenders have imploded since late 2006 by providing loans to people that should not have received them. So, let’s put the power of choosing appraisers in their unbiased hands!?!
Be prepared to see further (unwarranted) devaluation of homes due to this rule.