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Home Valuation Code of Conduct (HVCC)

The new Home Valuation Code of Conduct (HVCC) appraisal ordering policy has gone into effect at Direct Mortgage. This bulletin will (1) help you understand what to expect when working with Direct Mortgage due to HVCC; (2) answer some questions you may have; and (3) explain the benefits you will experience due to Direct Mortgage's process.

 

What To Expect

The HVCC's purpose is to "help assure that borrowers, homebuyers and secondary mortgage market investors receive fair and independent property valuations."

In the spirit of the code, and in order to ensure that there is not a biased connection between any parties, Direct Mortgage will be ordering appraisals for conventional loans and encourages you to use our HVCC ordering process for government loans.

If you choose to order your own FHA appraisal, we'll accept it with a desk review. If you order the appraisal through DMC, you'll save both money and time. Money, because there will be no desk review charge. Time, because you won't have to wait for your processor to go into FHA connect: our system will automatically order the FHA case number for you.

Desk reveiws are not required for FHA HUD Repo loans, since the appraisal is ordered by HUD.

Beginning January 1st, 2010, FHA appraisals will have to be ordered through DMC.

For conventional loans, we will accept appraisals not ordered by us only when they come from a lender who used a nationally recognized Appraisal Management Company (AMC). Desk reviews will be required on these appraisals.

The appraisal fee will be instantly displayed at the time of order specific to the property location. No more trying to figure out the appraisal cost in unknown areas.

The appraisal fee will be collected up front by DMC. Either the borrower or broker can pay the fee. The fee must be paid by a credit card. The appraisal will be automatically ordered – no waiting for a person to make contact.

The moment the appraisal is completed, it will be available to you in DirectWare Scanned Images, and you will be notified. In fact, most appraisals will receive an automated underwriting review at the same moment as well, saving everyone a significant amount of time.

To assist you in estimating a property value before proceeding with an appraisal order, we will provide for free the Tax Assessor value taken from the public records. We will also make available an automated valuation (AVM) for a small fee ó BEFORE ordering the appraisal. You can also use some of your existing methods: for example, you can search websites like zillow.com, etc.

eSignatures. One exciting development is the electronic signature process that DMC has implemented as part of this initiative, providing you and your borrower an automated eSignature process. Initial disclosures will be electronically signed by the borrower(s) and loan officer prior to the appraisal being ordered. Signing is over the Internet, and may take place at the broker's office or in another location such as the borrower's home. Each person signing will need to answer some questions in order to validate their identity.

You will be able to track the appraisal order using the "Shopping Cart Transactions" link located in the left-side menu under "Processing".

For detailed instructions on how the eSign process occurs, click here.
To view the HVCC, click here.

 

Questions & Answers  

Are there ways of assessing a property’s value before ordering the appraisal?
      Yes. We will offer two simple methods. You can also use some of your existing methods:

      1)    Tax Assessor Valuation. This is provided at no cost in DirectWare and
             is immediatelyavailable before you order any appraisal. (It becomes
             available the moment you validate the subject property address).

      2)    Automated Valuation (AVM). This will be optional in our “Order
             Appraisal
” before ever ordering an appraisal – and is another
             inexpensive way of gauging a home’s value before ordering the
             appraisal.

      3)    Existing Methods. Some of your existing methods might include
             websites such as Zillow.com.

Do I have to use Electronically Signed Disclosures?
      We encourage all borrowers to electronically sign the disclosures. While
      electronically signing is not required prior to submitting the loan, it is
      necessary for the file to pass underwriting. Exceptions are considered on a
      case-by-case basis.

      Electronic signatures proves borrower receipt of disclosures and allows for
      the immediate collection of fees. When disclosures are not eSigned, a
      three-day waiting period is necessary before a fee can be collected for the
      appraisal, which can delay the closing of the loan.

      In order to electronically sign the disclosures, the borrower and loan o
      fficer will simply need access to the Internet and an email account.

What if I want my appraisal transferred?
      The appraisal may be transferred at any time and for any reason – at the
      broker’s request. Simply contact your broker support person to make the
      request.

When is the last day that a broker was allowed to order an appraisal?
      April 30th. The last day that a broker was able to order appraisals was
      April 30th. Also, all broker-ordered appraisals had to be uploaded into
      DirectWare by May 11th, 2009. Appraisals ordered by a broker after
      April 30th or uploaded after May 11th will not be accepted.

When will desk reviews be required?
      A desk review is required on all appraisals not ordered by DMC with the
      exception of VA loans and FHA HUD Repo loans.

What about FHA and VA case numbers?
      FHA – Direct Mortgage will make the appraiser assignment in the FHA
      Connection, obtain the
      FHA Case number, and then forward the case number to the appraiser.

      VA – VA automatically orders the appraisal and selects their own appraiser
      when the VA case number is ordered.

When must the appraisal fee be paid?
      The appraisal fee will need to be paid by credit card before the appraisal
      will be ordered.

How much will an appraisal cost?
      The appraisal fee will be instantly displayed at the time of order specific to
      the property location. No more trying to figure out the appraisal cost in
      unknown areas.

Can I request a reconsidersation of value (ROV)?
      Yes. If you believe the appraised property value is inaccurate, you may
      request a reconsideration. This is done by filling out a reconsideration
      form and forwarding it along with 1 to 3 comparables. (The form can be
      found by by clicking on the menu item "Shopping Cart Transactions" found
      in the left side menu. Then click the blue "Reconsider Value" button.)

      The request for reconsideration must be submitted within 4 days of receipt
      of the completed appraisal. You will be able to track the ROV request
      through our "Order Status " screen.

What if another lender ordered the appraisal? Will you accept it?
      The spirit of the HVCC is that Direct Mortgage should order the appraisal.
      However, we will accept appraisals ordered by other lenders (not
      brokers) on an exception-only basis. There will be an additional fee(s) for
      transferring an appraisal.

Will the appraisal be typed in brokerís name or the DMCís name?
      The appraisal will be in Direct Mortgage's name.

Upon completion of the appraisal, to whom is it delivered?
      The appraisal will be delivered directly to the lender

 

Benefits
There are a number of benefits that will result from this exciting new policy:

  • Instant Appraisal Ordering. And you won't have to upload the appraisal as a condition; it’s done for you.
  • We’ll track the appraisal order with you. While you’ll still want to track your own appraisal order in DirectWare, our ordering process will essentially add an extra staff member to your team to ensure a timely delivery of your appraisal.
  • You’ll receive a quicker underwriting sign off of the appraisal.
  • The number of field reviews will be minimal, if required at all, which should reduce the overall appraisal cost to the borrower.
†††††††††††††††††††††††††††††††††††††††                        
  • Simple disclosures. They are created for you, and you can track the entire signing process from within DirectWare — from when the signing invitations are emailed to when the borrower has signed the disclosures.
  • Electronic Signatures are prepared in your company name, and will save you time & money. You don't have to spend extra time preparing the disclosures, paying a courier, nor waiting for delivery of the documents.
  • You won't need to upload the initial disclosures. They will automatically be uploaded and accessible through DirectWare Scanned Images the moment they are signed.
  • Signatures and forms will be readable by everyone – the borrower, the broker, the lender, and the secondary market. The forms will no longer be fax copies.
  • The underwriting condition for “Signed Borrower Disclosures” will be signed off as soon as each signature is obtained.
†††††††††††††††††††††††††††††††††††††††                        
  • Reduced transaction risk. This new HVCC should actually perpetuate & help protect the broker business channel.
  • Appraisals will be treated with more trust, which should improve the underwriting speed. The appraisal forms will cease being partially completed and the home values will be considered more reliable.
  • One Low Nationwide Appraisal Fee. You can provide a low cost & fast solution for your borrowers.

Learn about Direct Mortgage's e-Sign process.
Read the Final HVCC.
How to track an Appraisal Order.

 
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