The topic of conversation at this morning’s broker home tour in Sisters: the new guidelines regarding the appraisal process.
Kathy Kemper-Green, one of our local mortgage brokers, spoke about changes resulting from the new Home Valuation Code of Conduct (HVCC), which went into effect on May 1.
The revised HVACC, which applies to conforming loans backed by Fannie Mae and Freddie Mac, instituted a new system designed to make the appraisal process more impartial. In the past, mortgage brokers were allowed to order appraisals directly, but that is no longer the case. Now, only a lender or its designated third-party, known as an Appraisal Management Company, will be allowed to order the appraisal.
Because of this shift, Kemper-Green recommended that home-buyers allow more time for the appraisal process (a closing of at least 45 days) and noted that buyers would also now have to pay for the appraisal when it was ordered rather than at closing.
After the tour, I talked with a couple of other loan officers I know to get their take on the HVCC changes. Mitch Wilcox, senior mortgage planner with Response Mortgage Services, said he doesn’t anticipate any significant changes in how his loans are processed because as a mortgage banker (vs. broker) he will still order his own appraisals.
Meanwhile, Brian Liebman, senior mortgage banker for Directors Mortgage, said he doesn’t foresee significant delays regarding the appraisal process but is experiencing longer underwriting turn-around times (now, typically two weeks) because of the current high volume of refinancing. He also mentioned that he never charges clients any money up front, so he will cover the appraisal cost for his clients (which he will recoup at closing).
Bottom line: The lending industry is still in flux. So choose your mortgage professional wisely and know exactly what their expectations are from you and from their lenders and servicers before you write an offer.
About the Author:
Lisa Broadwater, GRI, CDPE s a Central Oregon-based real estate professional who specializes in listing and selling homes, especially in Sisters, Tumalo, Redmond and Bend.