The New York Times story "In Appraisal Shift, Lenders Gain Powers and Critics", by David Streitfeld, the author does an excellent job of taking its readers through the HVCC time-line and illuminating the current issues with appraisal ordering and pressure.
“We’ve been begging for years for enforcement of existing state and federal laws regulating appraising,” said Mr. Kennedy, a leader in the appraisal community. “We thought we were finally going to get that. But the code is doing nothing except putting ethical appraisers out of business.”
“The code [Home Valuation Code of Conduct] is a formula for continued problems with fraud,” said David Callahan, a senior fellow with the public policy group Demos who has studied appraisals. “Appraisers have been asking for a long time for a reliable firewall between themselves and lenders, and are further from it than ever.”
"The final version of the code gives much greater leeway to lenders. For instance, lenders can hire their own appraisers if they “recognize” that complaints will be forwarded to regulators."
"The appraisal world was stunned. Dave Biggers, the chief executive of A La Mode, a maker of software for appraisers, said, “It’s like telling me I can steal as long as I ‘recognize’ that complaints will be directed to the police.”
"Under the code, the role of deciding what is pressure is assigned to a new entity called the Independent Valuation Protection Institute [IVPI]. If appraiser complaints are deemed valid, the institute is supposed to forward them to regulators."
"Seventeen months after it was announced, the institute has no staff and no appraiser complaint hotline. All that exists is a single Web page."
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