When I first received the @PhiladelphiaFed working paper on The Impact of HVCC, I had no expectations. With so much discourse about HVCC, the paper could have gone a thousand different directions. I was on the edge of my seat as I inspected the document word for word. This is of course the first empirical review of the impact of HVCC.
Analyzing the paper revealed my emotions from the chain of events pre and post HVCC are still quite large and powerful; except this time it was different. After the first read, I was rather indifferent to the findings. Low values post HVCC didn’t shock me; they were inevitable. What the report didn’t say specifically was how unregulated HVCC influencers successfully alienated mortgage marketing appraising from neutrality. The unregulated, one sided, industry wide code basically funded and justified this perfect storm.
Focusing on the message over the emotion during the second and third read, it became clear the working paper was quite accurate and mortgage marketing appraisers are directly a source of the symptom. After discussing the working paper with peers, I resolved that we were officially provided an empirical analysis that revealed a specific symptom of the impact of HVCC; low values post code.
One of my favorite appraiser blogger’s @Jonathanmiller provided his analysis of the working paper in an article on @BloombergView called “Guess What’s Holding Back Housing.” My impression of the story line was how pre and post interference of Appraiser Independence by the HVCC shaped the “form fill” appraisal environment and that we have today. Acknowledging mortgage marketing appraisers enabled a forced position of weakness as a result of the HVCC wasn’t necessarily a bad thing. Still, appraiser’s reactions to the article came swift, harsh and high on emotion.
Something I’ve resolved to help manage those intense stressors and drama is to own my part of the journey to defeat.
The bright side of it all……HVCC is gone.
The Dodd-Frank Act, ginormous as it is replaced the unregulated HVCC codes with laws of Appraiser Independence Requirements (AIR) by state enforcement. This is huge and it’s something we didn’t have before. The challenges we face today are completely different than the last decade of the HVCC debacle. This is a new era of discovery for Appraiser’s Independence that in turn provides opportunity but only if it’s taken; both professionally and respectfully.