HVCC Update...

The HVCC rule has been in effect for 3 weeks and now the early reports is that it SUCKS!! I have spoken to a wide range on individuals involved; borrower’s LO’s, underwriters, processors, managers, account executives and they all think this rule is horrible!!! The rules came out with very little research and study as to the guidelines, rules, and circumstances for all parties involved, except for the AMC’s. Amc’s are Appraisal Management Companies. The general process for most banks is that the appraisal is ordered thru a secured website and they charge the borrower’s credit card. They are adamant about receiving payment. Once they receive payment, that is when the problems arise!! The AMC’s let their appraisers bid on the job, so in some cases, the appraisal is being done by the cheapest appraiser, not the best qualified. They post guidelines that they will contact the borrower with 2-4 days to scheduled and have the appraiser back to the borrowers within 5 business days…what a joke. Some appraisals are taking 2 weeks to get scheduled, and god knows how long before they come back to the borrower. This is causing a big problem, because a lot of borrower’s have rates that are locked in, and a bank will not underwrite a loan without an appraisal. When the lock expires, someone has to pay for an extension. Of course, AMC’s could care less, since like I mentioned earlier, they receive payment upfront. AMC’s don’t bother to look at location or type of home, again, they are looking for the cheapest labor possible, because that way they can keep more of the money that they charged the borrower. On 2 occasion, an AMC has sent an appraiser from Baltimore to Olney, and that appraiser used Baltimore pricing and adjustments for a 700k SFH in Montgomery county. An experience appraisal with 20 years in the industry, said it was one of the worst appraisals he has seen in his career. Of course the appraiser from Baltimore did not care about doing a good job, since he was already paid. The only benefit this rule is having is for the AMC’s!!


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