The Home Valuation Code of Conduct will be implemented on May 1, 2009. This is a business agreement between past New York Attorney General Cuomo and Fannie Mae. This is not federal legislation; however, if any institution plans on sending a loan to Fannie or Freddie, the HVCC needs to be adhered to.
 
There are many implications of this agreement for every person in the mortgage origination loop. The primary issue for brokers and appraisers is that mortgage brokers cannot order an appraisal directly from appraiser for a loan that may end up with Fannie or Freddie. To see the revised HVCC document and read the FAQs, visit Fannie's website here.
 
*Remember, FHA is a different loan program and for FHA insured loans, mortgage brokers will still be allowed to order appraisal directly from an appraiser.*

Many changes have occurred with FHA over the past few years and more recently Mortgagee Letter 2008-09 effective 1/1/2009 stating:
 
"Second Appraisal Requirements/Loan-to-Value Limits for Cash-Out Refinances: The instructions in ML 2008-09 regarding when a second appraisal is needed, and the requirements for that second appraisal, as well as the 85 percent limitation on cash-out refinances when the loan balance will exceed $417,000, remain in effect."
 
Visit Appraisal Scoop for all of the details!

Wow! Napa County finished up year 2008 with almost identical number of sales and listing when compared to year 2007. This is incredible considering the market changes in 2008. The end of 2008 shows a measurable decrease in the number of listings from the first 9 months of the year. There was sharp increase of the number of sales for the 2008 month of December when compared to December of 2007.

 

It is noted that the value of closed sales did drop nearly 23% year over year but we already knew that we were in a declining market. However, comparing the December 2008 closed sale volume shows that there was more than a 100% increase from December 2007 which appears to be mimicking the increased closed sale amount for the same time period.
 
Could this be a result of optimism of a new presidential administration? Could the Napa real estate market be starting to stabilize? Have prices reached equilibrium (mortgage payment equivalent to a monthly rent payment)? Or maybe the mortgage interest rates have just dropped so steeply that this is a small bump on the decline. Interest rates most likely won't stay this low for an extended period and last week they have started to increase from a historical low, albeit a minuscule increase. It is noted that the price of gasoline is starting to inch up as well. From the macroeconomics viewpoint this 60 Minutes piece seems to say we have a ways to go.
 
However, we have already begun to see investors stepping into the market for single family residences here in Napa. We have also been providing valuation consultation for investors on numerous properties that the investor looks to purchase at the REDC home auctions in Solano County. Properties now are beginning to have positive cash flow with a reasonable down payment. Having investors stepping in to buying again is also great for the stabilization of the market.

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