Posted by Anthony Demangone
As those of you who deal with Fannie Mae and/or Freddie Mac know, Fannie and Freddie now require that lenders follow the Home Valuation Code of Conduct (HVCC) in order to deliver conventional, single-family loans originated on or after May 1, 2009 to them. Many of you have told us about the difficulties you've had with the HVCC. NAFCU continues to seek relief from HVCC-related burdens. We also sent a letter to the Hill on this issue. Download H R 3044 Comment Letter.
The Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie and is in charge of their conservatorship, issued a statement to try to clear up common misunderstandings related to the HVCC. Fannie and Freddie themselves have also updated their respective "frequently asked questions" on the HVCC.Combined, these documents address, among other things, what loans are specifically covered by the HVCC and communication with appraisers and lender removal of appraisers. You can find these documents by clicking FHFA Notice or Fannie’s FAQ or Freddie’s FAQ. (And know how I love my FAQs.)
For example, here's a Fannie FAQ that attempts to clarify a major area of confusion: providing borrowers a copy of their appraisal.
Question: Can you clarify the requirements around Section II of the Code requiring the borrower’s receipt of the appraisal?
Answer: The Code requires that a borrower be provided a copy of the appraisal no less than three days prior to the closing of the loan. The Code allows that the borrower may waive this three-day requirement. Situations where a borrower is unaware of his or her right to a copy of the appraisal prior to the three days and is then provided a waiver of that right at the closing table, would not be compliant with the intent of the Code. The time period of rescission in a refinancing situation does not constitute a valid three-day waiver period.
The Code does not specify what form the waiver must take or whether it be oral or written. In addition, the Code does not prohibit that a waiver, given in a timely manner, be recorded at some later point when the parties are available. Each lender must develop its own policies, procedures, and documentation. For example, a lender may obtain a waiver from a borrower through an email, phone call, or some other means, prior to the three-day period, and then have that waiver recorded in writing at the settlement table or at some other time.
The three-day period begins on the day of the receipt of the appraisal. For example, in a non-waiver situation, where a borrower received an appraisal on Monday, the closing could be held on Wednesday. Saturday is included for purposes of counting the three-day period. Sundays and legal holidays are not included for counting the three-day period.
I would forward this to whomever at your credit union is tracking the HVCC issue.
In other compliance happending, the Fed has updaded the dollar amount of its fee-based HOEPA trigger down to $579, effective January 1, 2010. Read all about it here.
. . . is "oversees" Or, maybe, . . . "overseas"?
We are checking every letter these days to be certain another surprise doesn't attack!
By the way, thank you for all the wonderful guidance!
Posted by: DJ | August 11, 2009 at 11:31 AM
Oops. . . not "overseas" !!! Just without the "is" . . . I am losing it!
Posted by: DJ | August 11, 2009 at 11:33 AM
DJ. Pleez donut pik on mie grammer. I have werked harder to bettur my riting.
- Antony
Posted by: Anthony Demangone | August 11, 2009 at 11:40 AM
Deal!
Posted by: DJ | August 12, 2009 at 09:48 AM
HVCC needs to be scraped and start over form zero. Lets just follow the money in this deal. Eappraiseit was one of the four named in the law suit. Eappraiseit will also be the one that bennifits the most because of increased appraisals. It is also the elminating independant and small appraisal companies or the one man shop like myself. HVAC has reduced my company to almost nothing, and the 22 years I have spent building it up was a complete waste of time.
If this bill is not fast tracked very soon it will be pointless, because all of the small independant appraisers will be driving trucks. I am looking into it and that is NOT a joke!
Welcome to the Peoples Republic of the former United States of America.
What really makes me sick and afraid for my professional life is, we have to deal with the likes of Barney Frank for the next 16+ months.
Posted by: Michael Watson, MSA | August 18, 2009 at 05:50 PM