by Derek Ezovski
July 1, 2010 08:49 A
Attached is an article explaining how the new financial legislation is going to possibly discontinue the current Home Valuation Code of Conduct (HVCC) and establish a new process to ensure that appraisals are done by qualified, uninfluenced professionals. For those that follow the real estate industry, you know that the HVCC has been very controversial not because of its intent, but rather its implementation. In a nutshell, many Appraisal Management Companies have used the program to create models where the appraisers are either underpaid or unqualified. This has led to the controversy. However, the concept is a solid one which I would argue should be added to this legislation for environmental risks.
I presented at the CT Appraisal Institute meeting and prior to my presentation, the president of the CT AI discussed a bill that requires these AMC's to be registered. This makes sure that the people that run the AMC's are qualified to do it. But at least it was put together to keep better tabs on the implementation of the process. Right now, environmental risks are done in a haphazard way from bank to bank. Often, environmental professionals and companies are chosen based on the likelihood that they will not raise major issues in their studies. Often it is due to lenders having influence over the process.
The financial industry is making monumental changes to its regulatory efforts...why not add environmental to this process at this point?
What do you think?
http://www.dsnews.com/articles/financial-reform-legislation-calls-for-hvcc-replacement-2010-06-30