NEW APPRAISAL AND LOAN PROBLEMS

The Home Valuation Code of Conduct(HVCC)went into effect on May 1, 2009. HVCC establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. Realtors® and mortgage brokers are prohibited from selecting appraisers except for In House staff appraisers.

To date, only Fannie Mae and Freddie Mac have agreed to adopt the Code. There is a strong feeling in the Real Estate Industry that the new system has created manor negative results in the home sales environment. In one long sentence, sales fall through due to delays and bad appraisals, Appraisers are given less time to complete their work and get paid less, many appraisers have left the business, and the system even sends appraisers from another state to work in unfamiliar territory. One or more appraisers from California were sent to Tucson to perform appraisel work?

To date HUD, who administrates FHA, has declined to accept the HVCC. Suddenly, FHA is becoming the lender of choice in our floundering Real Estate Market.

A few facts from recent news releases and information offered on radio programs:

1) Approximately 1/3 of all home owners in the U.S. are upside down on their homes (i.e. their loan is greater than the current value of their home!)

2) An estimated 75 to 80% of those loans are sub-prime loans.

3) And for the first time in history, over 7% of those loans are prime loans!

4) In Phoenix, the national 33% estimate becomes 51% of homeowners that owe more than their house is worth.

An Arizona judge recently forced Wells Fargo Senior Vice President Joe Ohayon to Phoenix for 2 days to explain why so few loan modifications had been granted and why they failed to communicate with those seeking help?

The customer that filed the case that prompted this judicial action said they never told her there was a problem with her request paperwork, they failed to tell her they had turned her down on her request for help, and she states she is now about to lose her home of 15 years. Nice job, Wells Fargo.

For those facing the potential for foreclosure, please see my last blog, "Mortgage Help". I wish you success in overcoming the barriers that seem to persist.