June 2009

  Home Buyers’

Class

That is the name that many in the industry have given to the new Home Valuation Code of Conduct (HVCC) that went into effect May 1, 2009.  The intention of HVCC  was to increase the independence of the appraisal process.  It was meant to free appraisers from pressures to increase appraisals at the behest of Mortgage Brokers and Real Estate Agents.

The code of conduct is the result of a legal settlement with the attorney general of New York. It is applied nationwide. And it should be considered a case study in the value of the legislative process: If the HVCC had been a bill introduced into Congress, it would have never passed without having undergone drastic changes. But it wasn’t a bill and it isn’t a law; it’s a legal settlement by one state’s attorney general, imposed on all 50 states.

As often is the case with government intervention we get not the intended goal but instead a lot of messy side effects.  So far this what I have observed as unintended effects:

1)  Appraisals now take much longer resulting in the need for longer rate locks which results in the consumer ultimately paying a higher rates.

2) Out of fear of compliance many banks have outsourced hiring appraisers to third party companies who charge more and pay appraisers less.  So the amount spent by the consumer has increased while the amount of money given to the appraiser is reduced while companies who only job is government compliance has increased.  Also, the third party companies looking to make the most profit often hire appraisers that are unfamiliar with the area of the property resulting in bad appraisals.

These are two of the effects noticed so far.  As the industry adjusts to HVCC I will keep you updated.

Every second Friday of the month the Plaza District brings all kinds of people together. We rock out to great bands, look at beautiful art work and drink some of the best beer! This month Billy Joe Winghead was our featured band and they know how to keep a crowd going, along with there awesome music outside. Paula And Company Realtors featured artist this month was Tam Nguyen bringing her best acrylic-on-canvas paintings. Not only does The Plaza District bring in the fun every month but they also have the best businesses west of Classen, Paula And Company Realtors, No Regrets Tattoo, Evoke Coffee Catering, Josh McCullock Photography,Gibson Events, DNA Galleries, Collected Thread, PhotoArt, Lyric Theater, and the BRAND NEW Velvet Monkey and that’s just to name a few. I encourage everyone of all ages to come every second Friday of the month to see the awesome art work from Oklahoma City’s local artists and have some fun while touring the businesses!