The Federal Housing Administration will soon impose its own version of the Home Valuation Code of Conduct on its member mortgage lenders.
HVCC legislation, passed last May, prohibits any discussion between mortgage company representatives and appraisers regarding home values. As a result, some appraisers are now forced to work through a middle man – appraisal management companies – which added a new cost for home mortgage borrowers and reduced fees paid to appraisers.
The National Association of Realtors and the Appraisal Institute of America have both lobbied Congress to reverse or modify those requirements.
The federal government, however, plans to enforce the existing law. In a Mortgagee letter from the U.S. Department of Housing and Urban Development, the agency said while the agency has not adopted the HVCC, it plans on issuing new FHA appraisal order guidelines that are consistent with, and adopt language from, the HVCC. The updates will be in force for all case numbers assigned on or after January 1, 2010.