A Note to Congress

Dear Representative Giffords,

My wife and I recently decided that it would be best for us to leave Tucson and sell our home here. We have a toddler who doesn't see her grandparents back in the Midwest nearly enough, so despite the poor market, we put our house up for sale.

Within a few weeks, we had it under contract at a price that would let us leave town with about $6000 in hand after everything with the sale was handled. This isn't a lot, but it's our equity from the house (some of it). It seems that while our house was under contract, Andrew Cuomo, made a deal with Fannie and Freddie called the Home Valuation Code of Conduct without really thinking through all of the unintended consequences. Now, you'd think that a lawyer would have a clear understanding of unintended consequences, but I don't think that was the case here.

Our first pre-HVCC appraisal came in at the sale price. We expected a little more, but were pleased that it was at the sale price ($118k) in this market. After the HVCC deal became the new rule, the review appraisal came in at $85k. Now, I know that my house didn't lose $33,000 in value in two weeks. Under the new rules, the review appraiser was pulled from a pool of appraisers as per mandates, but get this, he was from Phoenix. I'd expect him to know the difference between Scottsdale and Peoria, but he obviously had no clue about Tucson.

The new HVCC rules that do not allow appraisers to exclude fire-sale foreclosures from comps, or require that the appraisers live in the area where they appraise means that our house got lumped in with foreclosures that may or may not even still have fixtures and plumbing in them. The appraisal was adjusted based on sale prices and photos from the MLS listing and supposedly adjusted for "condition".

I understand that the new rules are meant to keep collusion between lenders and appraisers from creating another bubble, but they're essentially clamping the home sale market off at the neck. If an appraiser can't separate my home from a beaten down foreclosure, or doesn't even live near my town, then something's wrong with the HVCC.

Sincerely,

Me