home valuation code of conduct (HVCC)^(US)

A code of practice that has been established for appraisals carried out when a loan is to be made or supported by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). The primary aim of the Code is to eliminate conflicts of interest, fraud and other misconduct in the mortgage industry. The Code will be effective for single-family mortgage loans (except government-insured loans) that are originated on or after January 1, 2009, and delivered to Fannie Mae or Freddie Mac.

    The Federal Housing Finance Agency (FHFA) (www.fhfa.gov), which was created on July 30, 2008 (Housing and Economic Recovery Act of 2008) with responsible for overseeing Fannie Mae and Freddie Mac, introduced a revised Code with effect from May 1, 2009.

    The Code of Conduct prohibits a lender, or its representative, from influencing in any way the work of an appraiser. This does not prohibit the lender (or any third party acting on behalf of the lender) from requesting that an appraiser (i) provide additional information or explanation about the basis for a valuation, or (ii) correct objective factual errors in an appraisal report. In underwriting a loan, a lender is prohibited from using any appraisal report prepared by an appraiser employed by the lender, an affiliate or any entity that, in whole or in part, owns or is owned by the lender. Any lender making a loan that is to be originated and delivered to Fannie Mae or Freddie Mac shall certify, warrant and represent that the appraisal report was obtained in a manner consistent with the Code of Conduct.