More information on those Appraisal rules...

Here is some more information about the newer appraisal rules that went into effect earlier this year...  there are some additional loan rules/etc that will be introduced soon that will increase the  length of escrow time and possibly interfere with the buyer's timing of rate locks/etc.  yikes!!

Take care, Karena

"Realtors: Home Appraisal Rule "Destroying" Recovery
Written for the web byPosted By: George Warren, Reporter  

 

CARMICHAEL, CA - Real estate agents say a new regulation aimed at reducing mortgage fraud is hampering the market's recovery.



"I've never seen a market like this where a ready, willing and able buyer couldn't buy the property," said veteran broker Bert MacBride.  



MacBride just lost three deals in a row because of the Home Valuation Code of Conduct (HVCC), which establishes restrictions on appraisals for conforming home loans. The HVCC took effect May 1.



The HVCC prohibits mortgage brokers and Realtors from contacting local appraisers to prevent undue influence. Instead, lenders draw from a pool of appraisers through an intermediary known as an appraisal management company.



"These appraisers may be 200 or 300 miles from the marketplace," said Rick Cunningham, a Fair Oaks appraiser who has seen his business drop by two-thirds since the HVCC took effect. "They (out-of-town appraisers) lack the data to do a competent report."



MacBride spoke to News10 in front of the Carmichael duplex where his latest transaction collapsed. The duplex was listed at $180,000 and attracted four offers. MacBride's was the highest at $188,000.



But a Bay Area appraiser valued the property at $165,000. The lender balked and the deal fell through.



MacBride said the appraiser probably used comparable properties that were bank-owned or in Citrus Heights, which is just a block away.



"There's something wrong with this appraisal process that needs to be corrected," MacBride said.



Tracey Saizan, the Keller Williams agent listing the duplex, said the seller has now dropped his price to $165,000 to reflect the appraisal and will lose $23,000 as a result. She said the seller also spent $4,400 unnecessarily on pest repairs before the deal fell apart.



"This (the HVCC) is destroying any chance we had of turning this market around," Saizan said. "We're going backwards."



Rep. Doris Matsui, D-Sacramento, has sent a letter to HUD Secretary Shaun Donovan asking him to review the HVCC.



by George Warren, GWarren@news10.net


Created: 8/25/2009 4:13:24 PM Updated: 8/25/2009 7:25:33 PM "