Appraisal Issues. The HVCC and the MDIA

Here is the latest on appraisals. Because of the new HVCC (Home Valuation Code of Conduct) dreamed up by the geniuses in congress, on conventional loans (this does not apply to FHA or VA loans) we are no longer allowed to contact the appraiser in any way shape or form.
Now each lender has established accounts with appraisal management companies (AMC's). As a mortgage broker we must now obtain the borrowers credit card info for payment and then go to the lenders website to put a request to order the appraisal.
The AMC is nothing more than a middle man who receives an order from the lender and then in turn contacts one of the appraisal companies on it's approved list and passes the order on to them. This of course adds an additional cost to the consumer as the AMC must get their piece of the pie. A typical appraisal that once cost $300 can be as high as $400.
Now once the appraisal is ordered the appraiser makes an appointment and completes the appraisal. It usually takes 3-5 days to complete the appraisal but depending on the appraisal company it may take 2 weeks just to make the appointment. When the appraisal is completed it is send back to the AMC who does their own in house review. If they have any issues it goes back to the appraisal company for changes. When the changes are completed it is sent back to the AMC who then forwards it on to the lender.
Now the lender reviews it and if they want any corrections it goes back to the AMC and the whole process starts again.
It gets better! Suppose the original lender has rigid underwriting and it 's a problems getting the loan approved. If the loan is sent to a new lender they might not accept a transfer of the appraisal from the first lender. That means a new one has to be ordered AND the borrower will have to pay for another appraisal!

Now on top of that we have a new law called the MDIA or Mortgage Disclosure Improvement Act!! For any loan including VA and FHA loans, an appraisal can no longer be ordered until the application is sent to the lender. The lender must then send a form to the borrower to sign which is then sent back to the lender. At that point the appraisal can be ordered through the process stated above for conventional loans. Some lenders have designed a list with a few forms that they will accept in lieu of the whole application in an attempt to speed up the process. But the bottom line is things are going to take even longer. I strongly recommend you set any closing for a minimum of 45 days going forward which you probably should already been doing. anyway

I think these guys just like to sit around and see what new acronyms they can think up.