Changes to HVCC

Reporting from Washington —

The financial reform bill signed into law by President Obama may look like a giant cornucopia of helpful changes for home buyers and loan applicants, not the least of which will be the creation of a powerful Consumer Financial Protection Bureau to ride herd on the mortgage lending industry.

But how soon will anyone see hard, tangible results of the law? When will the bureau begin writing new rules and cracking down on problems and abuses in areas such as home real estate settlements, credit scores, “truth in lending” and equal credit opportunity?

At the moment it looks as if it will be a while, even if the president nominates a director for the consumer protection bureau quickly and the Senate confirms her or him without partisan bloodletting or a filibuster. On the other hand, mortgage industry leaders say some of the core changes promised by the legislation are either already in effect — such as stricter underwriting and documentation practices — or should be soon.

Here’s a quick overview of what to expect and when.

From the LA Times a good overview of some of the changes that consumers can expect from the financial reform overhaul.

In the SF market the HVCC (home valuation code of conduct) has been a policy that has had particularly nasty unintended consequences. While the creation of 3rd party appraisal clearing houses certainly separated lenders from appraisers, it also had the unfortunate effect of appraisals going to the “lowest bidder” instead of the appraiser with the most local market knowledge. For that reason alone, I look forward to its hasty departure.