My New Blog

I get this question quite frequently so I thought it prudent to issue the following answer:

The new Consumer Protection Agency created by the Dodd-Frank bill stipulated that the agency must "rewrite" (not eliminate) the Appraisal Independence Standards within 90 days of the President signing the bill into law.

Upon its effective date, the new standards will replace HVCC and its provisions supersede those created by HVCC .  However, many misunderstand this to mean since HVCC is being terminated, none of its provisions will survive.  That is not the case.  As I understand it, the intent of rewriting the standards is to cure issues created or unresolved by HVCC including but not limited to Appraiser Compensation, increased cost to borrowers as a result of Appraisal Management Companies and the use of Appraisers not in close proximity nor familiar with the area in which they complete work. 

While the new agency has been silent on the issue thus far, it is expected the new standards will be similar to the FHA Appraisal Independence Standards (http://www.aimsdashboard.com/content/fhas-appraisal-independence-standard-effective-jan-1-2010).  The FHA standards mirror HVCC regarding the selection of appraisers and undue influence or coercion by interested parties, among  other items.

Absent the new agency publishing new standards, The Fed is expected to release an Interim Final Rule implementing the appraiser independence standard by Oct.19.  The impact or scope of this "interim" final rule is unknown at this time, but may possibly only address the issue of "common and customary fees paid to an appraiser absent an Appraisal Management Company".

I hope you find this information useful.