AUTHOR: Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. He can be reached at [email protected]
Yesterday's announcement from the OFHEO generated a lot of activity and discussion on what the proposed Home Valuation Code of Conduct (HVCC) will mean for appraisers, lenders, mortgage brokers and anyone involved with the home loan process.
The proposed HVCC is a far departure from existing routines and practices and like its predecessors, it will not find its way into mainstream lending without first navigating many obstacles and roadblocks.
Battle lines are being drawn and given the historic relationship of change and humans, you can expect a variety of self-serving positions and heated debate. In fact, we have already seen the first salvos from camps on both sides and you can expect more to follow. There are many issues to consider and at this point, we all have far more questions than answers.
Every residential appraiser has a dog in this fight and that being the case, our time for complaining has past and the time for action is upon us all. We can be reactive and accept what comes from the efforts of a few or be pro-active and part of the process of change. Having witnessed the process on several occasions with the R-41 memos and FIRREA, I would strongly urge you to consider getting into the game vs. sitting on the sidelines.
As I write this I can already hear the responses and laments about the "appraiser's petition", unanswered complaints, the problems of the past and how no one listens to our pleas, so spare me the reminders and lecture. We can't be focused on water under the bridge, we must be focused on constructive and beneficial comments, suggestions and direction on what is before us now.
This is not the time to question the motives of others, but rather the time to develop the framework that will serve the appraisal profession for years to come. What happened yesterday provided all of us with an opportunity to make a difference, if we are up to the challenge. The OFHEO and the New York Attorney General have set in motion the wheels of change. The direction they roll will be up to the tens of thousands of appraisers that choose to be a part of the solution or that let others decide their fate.
The Internet granted us all a voice in the process. The question for the moment is will it be "many voices speaking for one or one voice speaking for many?" We have forums, professional groups, The Appraisal Scoop, blogs, etc. within the access of a keyboard and the send button.
We have Windows Live and Google Docs for shared documents to assist us with formulating "the one voice of the many". Through our forums and groups we are semi-organized as a profession. The only question that remains is "are we ready to set aside our personal goals and agree upon a direction that benefits the profession as a whole?"
The changes proposed by the OFHEO will require significant input, time and effort. FHLMC announced today a 90-day comment period to gather feedback from all concerned parties and this is our window of opportunity. We can help them help us by providing workable solutions for the challenges confronting the OFHEO and implementation of the HVCC.
This means any recommendations must consider the business needs of all participants, including lenders, appraisers, mortgage brokers, etc., to be effective. If we cannot agree on the best solutions or provide policies and procedures that will minimize the business impact of the HVCC, how can we expect the OFHEO to implement a policy that is workable for us?
Please take the time to read the Home Valuation Code of Conduct, consider the principles within it and provide your groups or forum memberships with your observations and suggestions for the best ways to put into practice the intents of the agreement.
This is not the time to criticize the HVCC; this is the time to make it effective and to do so we must have a shared vision of the future. We must consider the business needs of all associated with the appraisal process and work together to formulate practical solutions that will transition the process from where we are today, to where we need to be to meet the spirit of the HVCC, with limited disruption of the lending process.
Given the time constraints and vested interests within the current system, this is a tall order. That is not to say that it cannot be accomplished, only to point out the obvious. So what are the next steps? Forums and groups are a logical place to begin. Take a leadership role and get the membership started in the feedback and comment process.
The focus should be on the principles outlined in the HVCC, suggested procedures to make them effective and ideas on how to implement those procedures in ways that will minimize disruption of current FNMA and FHLMC business practices.
The goal is two-fold:
- Address the issues and concerns from appraisers and lenders regarding the HVCC and;
- Provide a framework that will give the OFHEO ways to implement the HVCC with minimal impact to their existing business and clients.
Essentially. we simply cannot provide a list of problems without also providing a set of solutions that address those issues and concerns of their clients.
As of today, we have 90 days to make a difference. If you don't think that one person can make a difference or that one individual cannot effect change, please remember how we arrived at this point and a certain Palm Bay appraiser named Pamela Crowley.
AUTHOR: Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. He can be reached at [email protected] Look for the new Outside The Boxes category for a collection of Patrick's articles on Appraisal Scoop!
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