What America Needs to Know About HVCC and Financial Reform

This site is all about the real estate appraisal industry and in particular the complete destruction of thousands of small businesses across the country as a direct result of the Home Valuation Code of Conduct (HVCC) and its follow-up regulations that are contained in the recently passed Dodd-Frank financial reform bill.

Perhaps it will just be cathartic for me, but hopefully it will be productive.  Regardless it has got to be better then yelling at the walls and angrily attempting to explain what has happened to my business to family and friends.   If you are in the business you know the issues, if you are not you might not be familiar with the outright theft and monopolization of the residential real estate appraisal industry at the hands of massive companies who were aided and abetted by first the former Attorney General of New York and now Governor Andrew Cuomo and later by the U.S. Congress through the adoption of the Dodd-Frank bill which codified this theft.

This is the story that to my knowledge has never been properly aired by any news organization.  If people have any knowledge of HVCC it is the spin that Fannie, Freddie, politicians, national banks and title companies along with but to a lesser degree the National Association of Realtors and the Appraisal Institute have spun.  Basically it is this, the housing market collapsed in large part because residential real estate appraisers either colluded with or were inappropriately influenced by loan officers.

Beyond the absurdity of very small business people (most of whom work out of their home) collapsing the housing industry, it is true that a small percentage were inappropriately influenced and an infinitesimal amount were involved in colluding.    Fortunately there are laws and regulations that account for these deviants.

FIRREA, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 was our governments response to the S & L Crisis of the late 80′s.  Similar to HVCC, FIRREA in large part blamed the residential appraiser for that collapse and introduced appraiser licensing and USPAP (Uniform Standards of Professional Appraisal Practice).  The effects of this legislation is the subject of another discussion at another time, however since the residential real estate appraisal industry is now subject to another completely new set of regulations and has been blamed for the collapse of the housing industry, in the minds of the politicians it must have failed.

It is very ironic that after the collapse of the two housing bubbles that real estate appraisers faced the brunt of the accusations.  It is very odd that a group of people who make the least amount on any real estate transaction, far less than the Realtors, loan officers, banks, and title companies, are blamed for the troubles in the industry.

The truth is the appraiser is an easy mark.  We work largely alone and behind the scenes.  We are not wealthy and we do not have much interaction with other appraisers.  We are not organized and we do not have any political clout.  We are the perfect scapegoat, again.

This is a story of what happens when the socialized secondary mortgage market, meets corrupt, arrogant and or ignorant politicians and how the Crony Capitalist mega corporations profit while destroying the life’s work of thousand of honest, hard working Americans.