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The Home Valuation Code of Conduct (HVCC) was created as a result of a joint agreement between Fannie Mae, Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General's Office. The HVCC's purpose is to enhance the independence and accuracy of the appraisal process.
As per the HVCC; "No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partners on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner." Examples of HVCC violation include, but are not limited to.
- Withholding or threatening to withhold payment.
- Withholding or threatening to withhold future business.
- Demoting or terminating an appraiser.
- Expressly or impliedly promising future business.
- Requesting that an appraiser provide an estimated, predetermined, or desired valuation.
- Providing to an appraiser an anticipated, estimated, or encouraged value.
Important facts about the Home Valuation Code of Conduct include, but are not limited to the following.
- The HVCC only addresses the relationship between the lender and appraiser. It does not address real estate value.
- The Home Valuation Code of Conduct does not require that all appraisals are ordered through an appraisal management company (AMC). Please note a real estate appraiser may receive appraisal orders directly from a lender.
- The HVCC prohibits brokers from selecting a real estate appraiser from a lenders list.
- The borrower is entitled to a copy of the appraisal no less than three business days prior to the closing of the loan. However, the HVCC allows the borrower to waive the three day requirement.
As of a result of the Home Valuation Code of Conduct, Fannie Mae and Freddie Mac no longer purchase mortgages which have not adopted the HVCC. Lenders who sell loans to Fannie and Freddie must show that they have in place the structure, policies, and procedures required as for Code compliance.
As for disclosure, please note the AbcAppraiserDirectory.com is not approved as per the Home Valuation Code of Conduct (HVCC). Please visit our About Us page for additional information.
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