William Fall is the founder and CEO of the William Fall Group
and its AMC subsidiary Valuation Partners
, which has been growing quickly since Home Valuation Code of Conduct (HVCC) came into play.
For this edition of In This Corner
, Fall sits down to give the AMC side of the HVCC story and what the market will look like when it's gone.
HVCC is dead, and they're putting new guidelines in place. What do you think those are going to look like?
While HVCC is ending
, it will have a lasting impact. Important tenets of the HVCC were clearly reinforced by the recent Dodd-Frank legislation, such as appraiser independence, and the separation between appraiser engagement and loan production activities remains. In fact, this separation has been further embedded in the seller servicing guidelines of the GSEs and with most major acquirers of mortgage loans. I would expect future oversight, guidelines, and legislation to largely parallel these fundamentals.
Real estate appraisers have been cut out of the business by HVCC. With it gone, do you think they will see new business?
Appraisers that are willing to adapt to a different form of doing business will not only survive, but thrive. By providing proper support for the collateral of a loan, the educated and well-supported opinion of the independent-thinking appraiser has never been more valued.
How can appraisers adapt to new ways of doing business?
Everyone in the mortgage process needs to fully embrace advancing technologies, but no one more so than the appraiser. Because technology and the deployment of new analytical tools can increase productivity and provide better and quicker evaluation of data, they will only reinforce the relevancy and role of the appraisers of tomorrow.
What is the post-HVCC real estate industry going to look like?
It is important to remember that the initiatives that began through the implementation of the HVCC and related guidelines have only been in place for a short time. A new framework for acceptable communication between parties in the transaction has not yet been found. The same goes for the question over appraisal portability. My sense is there has to be more time before these and other issues can be finalized, particularly in light of new federal legislation.
The HVCC drama aside, there are some houses to value, and in such a volatile market, how do appraisers juggle shifting house prices and nearby foreclosures to get an accurate appraisal?
An appraiser’s job, fundamentally, is to reflect the behavior of buyers and sellers interacting in the marketplace. But when depressed sales become a realistic influence within the sub-market of the subject property, price expectations often fall short of expectations. A tough pill to swallow, but nonetheless a proper indication of the current picture. Fortunately, most experienced appraisers are equipped to handle the processes and procedures required to perform a proper analysis. Another positive development is that the level of data collection and proper analysis has increased, particularly since the onset of the current economic downturn. In volatile markets, the best solution is a combination of experienced, professional appraiser with the highest quality of data and analytics that technology can provide.
Valuation Partners, The William Fall Group’s subsidiary, produces AVMs and BPOs. Which one has a higher demand?
Given the greater concern over value support, our BPO requests are clearly more sought. But the interesting thing is that we have seen increasing demand for appraiser-assisted products in both AVMs and BPOs.
How are appraisers assisting in the generation of these products?
The informed judgment of the appraiser both strongly reinforces and contributes to a better outcome for electronically created valuations, and complements the expert real estate agent’s opinion. I think that’s why we’re seeing similar products emerging in this space. An appraiser is uniquely qualified to refine the key attributes influencing the value of a subject property.
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