As Congress hammers out new policy on financial regulatory reform, the Home Valuation Code of Conduct inches closer to extinction. Two weeks ago, the House of Representatives passed H.R. 4173, or the Wall Street Reform and Consumer Protection Act of 2009, which includes an amendment that would eliminate the HVCC, the set of standards on ordering appraisals for house purchases that went into effect May 1. On the Senate side, Senate Banking Committee chairman Christopher Dodd (D-CT) and ranking member Richard Shelby (R-AL) released a joint statement on the progress of financial reform. “I’m pretty concerned. I think some of the initiatives under the House Resolution 4173 are laudable. But they really stop short of dealing with the business and operational issues that are really core to consumer confidence,” William Fall, CEO of the William Fall Group, said in an interview with HousingWire. The William Fall Group provides real estate valuation services to the financial, public and governmental sectors. HVCC is result of an agreement made in March 2008 between mortgage giant Freddie Mac (FRE), the Federal Housing Finance Agency (FHFA) and the New York Attorney General. “By allowing mortgage brokers to select appraisers, I think we’re closing our eyes and forgetting where we came from and reinstituting the very same processes that got us into such a problem to begin with,” Fall said. Fall added that he’d really like to see a better definition of the Consumer Financial Protection Act. Beyond that, he said that some of the rule-making aspects of how the mortgage industry behaves are better set by those who are involved and engaged with the industry. “It really is, in my view, better left to the experts as opposed to a legislative mandate,” Fall said. “What hasn’t been heard above all the noise about HVCC is that it has clearly improved appraisal quality as reported by Fannie Mae, Freddie Mac and by our direct clients, lenders.  Those are the exact people in my view that are in the best position to define the rules of the interaction among the various parties.” Fall sees a much higher degree of confidence slowly returning to the market on the part of both lenders and homebuyers. “This, in my opinion, is due in part to the transparency and the fundamental confidence that comes from knowing that they’re getting a fair, uninfluenced opinion of value,” Fall said. “Neither HVCC nor the appraisal management model are perfect, but appraisal management companies still provide one of the best solutions for the lending community when it comes to providing an unbiased opinion of how collateral is properly valued.” In the joint statement, both Dodd and Shelby said that talks are productive, and the differences should be resolved before Congress reconvenes in January 2010. “I’m very concerned that actions such as those spelled out in House Resolution 4173 will diminish that or possibly damage consumer/lender confidence and our industry irrevocably,” Fall said. Write to Jon Prior.