The government-sponsored enterprises (GSEs) will implement a process to accept complaints and allegations of Home Valuation Code of Conduct (HVCC) violations. However, in a letter to New York attorney general Andrew Cuomo, Federal Housing Finance Agency (FHFA) director Edward DeMarco said the Fannie Mae (FNM) and Freddie Mac (FRE) would not establish and fund an Independent Valuation Protection Institute. The institute was a component of the agreement between the GSEs, Cuomo’s office and the FHFA’s predecessor, the Office of Federal Housing Enterprise Oversight, which led to the creation of the HVCC. “In light of the billions of dollars in taxpayer funds the Enterprises have drawn since entering conservatorships, I cannot, as conservator, justify the Enterprises funding the Institute,” DeMarco wrote. “Therefore, as conservator, I have determined that they will not proceed with that portion of the Cooperation Agreements.” Instead of the institute, the GSEs will have a “targeted complaint process” to enforce the HVCC, that includes a standardized complaint form and process for submitting complaints via the Internet. DeMarco said the process will be in place in the “next few weeks.” The HVCC prohibits lenders and third parties from influencing the development, result or review of appraisal reports and limits the interaction between appraisers and loan production staff. The code, implemented in May 2009, has led to in a rise in the use of appraisal management companies (AMCs), but has drawn the ire of independent appraisers who claim they’re being cut out of the market. “As intended, the Code has improved the independence of appraisers — reducing opportunities for fraud, protecting consumers in the mortgage process and providing greater confidence to the investor community in their purchases of securities backed by mortgages that have appraisals performed under the Code,” DeMarco wrote. “Ultimately, these effects inure to the benefit of homebuyers as well.” “Freddie Mac and Fannie Mae each have found that appraisal quality has improved since the Code’s implementation,” the letter added. Cuomo’s office did not immediate respond to HousingWire’s request for comment. Write to Austin Kilgore. The author held no relevant investments. Want more on the HVCC? Check out HW Focus, a supplement series created by HousingWire.
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