Home Valuation Code of Conduct Summary - May 1st Deadline

Date: 5/15/2009

The Home Valuation Code of Conduct (HVCC or the Code) was created to enhance and protect the independence and integrity of the home appraisal process. While there are several resources available, below is a recap of some of the basics of the code:

• Effective on loans with application dates on or after May 1, 2009.
• Establishes a uniform set of appraisal guidelines (including ordering guidelines) for all loans sold to FNMA and FHLMC in all states. It does NOT apply to FHA/VA loans.
• Lenders must ensure they are compliant with the HVCC and the appraisal process is completely independent of their loan production.
• The appraiser must be compensated by the lender, Appraisal Management Company (AMC) (use of AMC not required), or other lender authorized third party. The broker may NOT select or directly compensate the appraiser. The broker or borrower may reimburse the lender for the appraisal fee.
• A complete unaltered copy of any appraisal report must be provided to the borrower prior to 3-days of closing unless the borrower waives the 3-day requirement.

MBS-ProClose created a Borrower Receipt of Appraisal Acknowledgment form to be signed at closing and included in all Conventional loan packages (as required by Investors such as Wells Fargo). It includes a checkbox for either meeting the 3-day receipt requirement or the 3-day receipt waiver option and is signed by the borrowers. The ProClose form ID is AADID1.

As the final deadline approaches, please review and finalize your appraisal procedures for compliance with HVCC. Additional resources are available from:

Fannie Mae
Freddie Mac