In his Johnson City, Tenn. office surrounded by golf photos and memorabilia, veteran real estate appraiser John Bullington isn’t talking tee-times. Instead the avid golfer is shouting “Fore!” over some new legislation called The HVCC or Home Valuation Code of Conduct that went into effect May 1, 2009. The appraisal reform agreement of New York Attorney General Andrew Cuomo requires institutions that deliver loans to Fannie Mae and Freddie Mac to adopt the HVCC. Bullington says the HVCC may have been well intended but unfortunately while trying to “clean up” what appeared to be a New York-based problem, it has backfired and appraisers nationwide are taking the hit.

The HVCC mandates an arms length separation between the people ordering the appraisals and those actually performing them. That’s where Bullington, a past chairman of the Tennessee Real Estate Appraiser Commission, says middlemen have gotten in the mix. He says these “opportunists” have taken the form of certain Appraisal Management Companies (known as AMCs).

“This guy does not have to be a certified appraiser but he usually takes a large percentage off the top,” says Bullington. “Furthermore since many of these new AMCs are from outside the market, the appraisals could come in with misleading values,” he adds.

Who ultimately pays? The consumer. Cases have been documented across the country of lag times and higher transaction fees.

Bullington is warning lenders that they do not have to use the AMC’s. Recently, he received a copy of a letter sent to an East Tennessee bank written by a representative of an AMC. He says, “This appraisal management company is telling lenders that they must use them and that is incorrect.”

Bullington is a certified general appraiser in Tennessee, North Carolina and Virginia. He was appointed to the Tennessee Real Estate Appraiser Commission by Governor Sundquist for and again by Governor Bredesen.

Bullington can be reached at 423-854-9277 or by e-mail at john.jabco@charterinternet.com .