REALTOR® Magazine Online: The real estate professional's business support tool.
OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®
  

QUIZ: Test your knowledge of the new HVCC guidelines

 Since it took effect May 1, 2009, the Home Valuation Code of Conduct (HVCC) has generated significant commentary among real estate professionals, appraisers, and lenders—as well as plenty of uncertainty over exactly what the agreement does and does not allow. The HVCC is a set of guidelines to curb inaccurate appraisals developed by New York Attorney General Andrew Cuomo and the two secondary mortgage market companies Fannie Mae and Freddie Mac, with support from their regulator, the Federal Housing Finance Agency.

In general, the guidelines seek to ensure an arm's length relationship between the lender making a loan and the appraiser who assigns a value to the house. It also sets forth a process for addressing incidences in which appraisal misconduct is suspected. Test how much you know about the new appraisal guidelines.

1.Only a third-party appraisal management company (AMC) can select an appraiser. The lender itself cannot do so.
True
False


2.It's OK for the lender to contact the appraiser with additional information or point out potential errors.
True
False


3.It's OK for a real estate professional, as a third-party independent contractor, to provide additional information to an appraiser or point out factual errors.
True
False


4.It's OK for mortgage brokers to select appraisers.
True
False


5.A lender can accept an appraisal report commissioned by another lender.
True
False


6 .In underwriting a loan, the underwriter can't use an appraisal if the appraiser was selected by the lender (or the appraisal management company that acts on the lender's behalf).
True
False


7 .Transactions that previously didn't involve an appraisal now must include one.
True
False


8 .Use of automated valuation models is strictly prohibited; all appraisals must be conducted by appraisers using onsite requirements outlined in the guidelines.
True
False


9.Borrowers must pay appraisers directly.
True
False


10.Appraisers are required to ensure borrowers are in receipt of the appraisal report no later than three days prior to the closing of the loan.
True
False