The Home Valuation Code of Conduct (“HVCC”) establishes a code of conduct providing for standards to be followed by lenders, appraisers, real estate agents and other third parties involved in the mortgage process. The HVCC became effective as of May 1, 2009. It is not new legislation passed by Congress but rather an agreement that was entered into by New York State Attorney General Andrew Cuomo, and Fannie Mae and Freddie Mac, also known as government sponsored enterprises (“GSEs”), involving the establishment of “…standards for solicitation, selection, compensation, conflicts of interest and appraiser independence…” relating to the appraisal procedures to be followed in connection with mortgage applications on one to four family homes.
The National Association of Realtors® (“NAR”) made several attempts to delay its implementation in order to provide more time for real estate professionals to prepare for it and because of the adverse consequences that it could have on the already fragile real estate market. Many also believe that the HVCC may have an adverse effect on the real estate market by placing additional burdens and restrictions on an industry that has already been hard hit. Nevertheless, it became effective on May 1, 2009 and as far as is evident, the HVCC does provide protections that are necessary and will not have as dramatic an effect as many had expected.
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