Jim Johnson

HVCC Finally Under Review



Posted: Saturday, November 07, 2009

by
Metropolitan Mortgage

HVCC is under attack and it deserves it. Does the HVCC affect FHA mortgages? What exactly is the HVCC and how does it affect homes for sale in Everett. HVCC means Home Valuation Code of Conduct and applies to how appraisals of real estate are done. This really has crippled the real estate business. It has consistently brought in low ball values on homes. Finally a few in congress realize what damage it is doing our economy. These few congressmen are trying to force a review and postponement of enforcement of the HVCC. HVCC was created to cut down fraud.

This has crippled the refinance business, just when we need the ability to refinance adjustable rate mortgages whose rates are going thru the roof. Because of the low ball appraisal a home will have no equity for the closing costs associated with a refinance. Most home owners don't have $6000 to $8000 to pay out of pocket. With an interest rate hike this forces home owners into foreclosure when they didn't have to go.

In the case of a sale when a willing buyer and a willing seller make a deal a low ball appraisal screws it all up. An appraiser doesn't make a market. Assuming a knowledgeable buyer and a knowledgeable seller make a deal, that is the market.

And no HVCC doesn't affect FHA mortgages or VA mortgages at this time. Although it is being considered for future usage in FHA mortgages. There are many complaints about HVCC. HVCC appraisals are being done in some cases by non professionals. Also many times an appraiser from outside the area is called in to value a home. For refinancing and purchases this can be a disaster. Without proper knowledge of the local area many valuations come in so low as to make transactions impossible. Many believe that HVCC is holding the real estate market down and slowing the over all recovery of the economy of the entire US.

HVCC was designed to stop fraud but it hasn't. Fraud for October 2009 is up almost 50% over the month of October 2008 just one year ago.

Currently HVCC is used only for conventional mortgages. But HVCC has killed the conventional mortgage business. Almost all loans are now FHA mortgages or VA mortgages. This is because they don't have to use the HVCC guidelines. Another problem for the future becomes the huge liabilities HUD takes on because they are the only agency making loans. It is far better to spread the risk around. Spreading the risk is a lesson we should have learned from the mortgage bubble.

Anyone who thinks the government can help is blind to these facts. Barney Frank, Chris Dodd and Andrew Cuomo are responsible for this fiasco. So far almost everything the government has done has hurt the consumer. Why doesn't that surprise me?

Have you ever heard of the Law of Unintended Consequences? Remember this the next time some government hack wants you to support another big government takeover. It never works as planned. In fact it never works at all.

The fools running our government have made our country a huge debtor nation and screwed up our economy so badly that it may take generations to work off the debt.

In business if you fail you go bankrupt. In government if you fail you get reelected. The foxes are in charge of the hen house.

So anyone, FSBO or professional real estate agent with a home for sale in Everett should consider the HVCC and it's impact on your transaction. Everett-mortgage-on-line

Jim Johnson E.A. retired; (Enrolled Agent, licensed to practice law in tax court) BS -19+ year experience as an independent loan officer. My background is extensive: 15 years as an Enrolled Agent Licensed to Practice law in tax court, Real Estate Agent 15 years, BS Accounting, Economics University of Wisconsin - Milwaukee.

In 2009 I ran for mayor of Everett, WA I lost but did receive 30% of the votes.

Currently I offer local political commentary in KSER Radio 90.7 FM every Wednesday at 9:05 AM.

Viet Nam Veteran

Everett Mortgage on Line

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Top-level comments on this article: (1 total)
» left by Deana Guidi
 2 years 82 days ago.
20 fans.
Jim, I am glad you are informing our Search Warp community of how the current real estate market works. People who have not been involved in real estate transactions within the past year probably are not aware of HVCC and the latest news on ARMS.
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