An HVCC Nightmare

 | Comments Off on An HVCC Nightmare

Steve and Colleen found the ideal home, Along with 6 other people they made an offer equal to the 2 other top bids. Theirs was accepted due to comparative strength i.e. 20% down and over qualified.

All went well and the appraisal was ordered through an Appraisal Management Company (AMC) as required by the new HVCC regulation. As a result of this the appraisal was allocated to a company located in a town 60 miles away on the next County. and was performed by someone with no knowledge of the community in which the property is located. Their 1st effort was rejected by the AMC for reasons they refuse to share. The 2nd effort took 2 weeks to be delivered and valued the property $80,000 below the contract price. For comparable sales it used 3 Bank owned properties totally unlike the subject, and justified this in writing by stating  that  it was in a Distressed  neighborhood with ever increasing inventory and Lengthy Time to Sell statistics. Both of these were totally untrue.

The Buyers obtained a new appraisal from a local company which indicated the property was correctly valued at the contract price. I provided an MLS report clearly showing that the neighborhood had seen fewer new listings coming to market for 6 months in a row, and that the Average Time to Sell was 11 days. The AMC company said they would review based on this information but came back saying they saw no reason for change.

This effectively cancelled the transaction and the property went back on the market Monday morning. It had 3 offers above the previous contract price and was back in escrow with 2 back-ups by Tuesday evening.

In the meantime Steve and Colleen had to move out of the house they had been renting, put all their belongings in storage, and move in with parents.

All this is due to a new rule resulting from action by the State Attorney of New York against Fannie Mae and Freddie Mac. There was no congressional debate or vote by elected officials.

The AMC’s are totally unregulated and paid up front for the appraisal. They charge about $200 more than a traditional appraisal then invite bids for the job from any licensed appraiser regardless of location or local knowledge. Given that they keep any of the upfront payment that is not paid to the appraiser there is an obvious motivation for them to give the job to the lowest bidder regardless of qualification.

If you are unfortunate enough to have a similar experience please take the time to share it at www.PropertyUnitesUs.com where The NAR and CAMB are collecting ammunition to get this grossly written regulation modified or repealed.

Note: Just for information I find it very interesting that Banks are allowed to own an AMC. For example, Bank of America owns Landsafe, the perpetrators of this farce.

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.