The May 1 deadline for the new Home Valuation Code of Conduct (HVCC) is rapidly approaching. Beginning Friday, Fannie Mae and Freddie Mac will refuse to purchase mortgages that do not comply with the HVCC regulations for property appraisals.
A number of technology companies within the industry have introduced solutions to help lenders meet the new HVCC requirements. The most recent to do so are Knoxville, Tennessee’s Sthenia Solutions and Wilmington, Delaware-based MDA Lending Solutions.
According to Sthenia Solutions, its LoanMarq application is a simple, cost effective solution for mortgage companies to comply with HVCC. The company has added an appraisal manager function to the web-based LoanMarq technology, which it says will now coordinate all home valuation aspects of the mortgage transaction in-house, while satisfying HVCC rules.
Sthenia CEO Paul Piers commented, “In this economic climate, the mortgage industry should expect new regulations, and the new Home Valuation Code of Conduct is one that will operationally change mortgage company work flow.” Piers added that his company’s LoanMarq technology can help companies simplify any operational difficulties that arise from the new rules, eliminating the need to outsource the function while retaining existing appraiser relationships.

MDA Lending Solutions has upgraded its ePolicy workflow system to provide mortgage originators with assurance of HVCC compliance. The company’s configurable ePolicy software now includes a managed appraisal portal that enables mortgage banks and wholesale lenders to present a list of approved appraisers to originators based on business rules and filters for cost, availability, location, and certification.
Bill Richer, president of MDA Lending Solutions’ MindBox division, explained, “HVCC requires that lenders order their appraisals from non-biased third-party sources. The challenge lies in quickly identifying those appraisers who are qualified, affordable, and eligible.” According to Richer, his company’s ePolicy appraisal portal takes the guesswork – and compliance risks – out of ordering appraisals.
DS News reported earlier this week that the National Association of Realtors (NAR) is pushing for the GSEs and their regulator to delay HVCC for at least another year. NAR argues that lenders and servicers haven’t had enough time to prepare for the changes mandated by the new appraisal guidelines.
The National Association of Mortgage Brokers has joined NAR in their petition to postpone implementation of the HVCC rules. Among the changes included in the new code is the requirement that mortgage brokers must go through lenders for property valuations rather than ordering the appraisals directly. Mortgage brokers contend that this will make it difficult to compete with lenders.
The goal of HVCC is to eliminate the potential for home values to be inflated in order to justify higher mortgages. Proponents of the new guidelines argue that hyped appraisals played a role in the nation’s mortgage meltdown.
The Center for Public Integrity, a nonprofit investigative research organization based in Washington D.C., says that an increasing number of homeowners facing foreclosure are becoming aware that the appraisal they paid for during the purchase process may not have reflected the true value of their investment, and may have caused them to borrow more money than their home was actually worth.