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HVCC Appraisal Horror Story; FHA Not Slower

Consumer Confidence is up; New Home Sales are up; and Durable Goods Orders are up. Normally all this “good news” would send the stock market up too, and the bond market down – resulting in higher rates. The stock market, however, was unimpressed because New Home Sales and Durable Goods Orders are only up month over month; they are down compared to last year. In addition, Home Sales have been so stagnant that it is hard for them to not go up.

What impressed the bond market was the fact that there was significant demand (other than our own Government buying its own debt) at yesterday’s sizable auctions of government debt. This is good news for the real estate industry because it signals continued lower rates, as the market still values Government Debt. When we see bond auctions with no buyers other than our own government, we all need to get nervous.

HVCC Appraisal Horror Story: We had an “As Is” Fannie Mae deal in July that required an HVCC Appraisal. We ordered the appraisal right away but it took the appraiser over a week to inspect and another week to get the appraisal back to us. To make matters worse he came in far under the contract price, despite numerous comparable sales supporting the contract price. This, of course, required a lengthy contract renegotiation. Further making matter worse, the appraiser “called out” some very minor repair work (that most would consider “de minimus”). We had the repair done, and then we had to wait over a week again to get the appraiser to go back out for “The 442” (Certificate of Completion). Because of this illustrious appraiser, with no sense of or need for accountability, we closed three weeks late.

If the above deal had been an “As Is” FHA transaction, there would have been NO appraisal issue, as HVCC Guidelines do not apply to FHA loans. Also, it is a myth that FHA transactions take longer to close. We can close as fast as three weeks if necessary.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167