More Problems for Local Real Estate?

A relatively recent government edict known as the Home Valuation Code of Conduct (HVCC) has the potential to have a major impact on Fredericksburg, TX real estate. Anecdotal evidence suggests these effects are already being felt as deals are coming apart based on appraisals from “professionals” not familiar with our local market conditions.

The rules, which went into effect May 1 for all conventional, single-family loans destined for sale to Fannie Mae or Freddie Mac, prohibit mortgage brokers and real estate brokers from ordering appraisals and require that lenders erect a firewall between loan production staff and the appraiser. Sounds reasonable.

Problems have arisen, however, as the code is vague and confusing. In fact, the six-page HVCC is so difficult to interpret that Fannie Mae has produced an eight-page document of frequently asked questions. Freddie Mac has published guidance, too—and still many questions remain unanswered.

A very informative analysis of the HVCC has been published in REALTOR Magazine and can be found on line at: HVCC