What is HVCC?
The home valuation code of conduct or HVCC is a set of guidelines provided by the federal government with the aim of increasing the reliability of home appraisal processes, according to Redfin.
These guidelines design how home appraisers are selected and paid to reduce the chances of corruption in the process. In doing so, the HVCC forbids real estate agents and mortgage brokers to pay or decide home appraisers.
Who decides the appraiser?
The appraising process must be conducted by a third party to make sure that results from this process are reliable. Your lender or other third parties are the ones allowed to select and compensate the appraiser. However, the client (home buyer) will pay for the appraisal costs.
As Bank of American noted, the appraisal charges will be combined with the closing costs and they will be included in the closing disclosure.
Who must comply with HVCC guidelines?
The HVCC’s primary job is to eliminate frauds, misconducts, and conflicts of interest to protect borrowers of mortgages and make sure that the loan industry is reliable and fair to all parties. The HVCC guidelines were established by Fannie Mae, Freddie Mac, and the New York Attorney General’s office, according to Realestatedefined.
For this reason, all appraisals conducted for loans and mortgages that will be submitted to Fannie Mae or Freddie Mac must be in compliance with HVCC rules.
