HVCC Not to Blame for Low Appraisals, Says FHFA

While concerns about low appraisals are legitimate, the problem is not necessarily with the Home Valuation Code of Conduct, a key federal regulator told an angry crowd of real estate professionals in San Diego. "We keep trying to find a provision (in the HVCC) that is causing problems, but we can't," Alfred Pollard of the Federal Housing Finance Agency said at the National Association of Realtors' annual convention. NAR members are hopping mad at delayed closings and lost transactions. In a survey conducted earlier in the year, three our of four agents said it is taking longer to get appraisals and the holdup is affecting their sales. But Mr. Pollard, the FHFA's general counsel, said that a few lost deals may be the price that has to be paid to rid the marketplace of lousy appraisers. Mark Johnson of LSI Title, an appraisal management company, also defended the code. While there are some "bad actors" in the AMC sector, he said, "the reality is that no matter how you look at it," the increase in complaints coincided not only with the "huge decline in prices that took place last year" but also at a time when mortgage rates hit bottom and lenders strained to handle the volume of applications. "There were too many loans in the pipeline," said Mr. Johnson, who manages the appraisal and valuation divisions at LSI, a division of Lender Processing Services. "I'm trying to be humble and confident at the same time," he told a session of hostile Realtors, "but applications tripled in some cases."