Consumer complaint received 2023-03-06
Company: NVR INC.
State: IL
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
I purchased a new construction home. The homebuilder is NVR IncXXXX, XXXX XXXX XXXX. I used NVR Mortgage Finance, a related company to the homebuilder by common ownership. The appraisal ordered by NVR Mortgage appears to violate several independence and USPAP standards and gives the appearance of inpropriety. I contacted NVR Mortgage several times with my concerns, but they indicated they reviewed the appraisal and confirmed it was an appropriate appraisal. The mortgage was sold to XXXX XXXX  post-closing. 

The concerns I have with the appraisal are : - The primary comp used in the appraisal is a related transaction. The comp was the homebuilder 's model home that was sold to an investor. The homebuilder and the mortgage company who ordered the appraisal are related by common ownership. The appraisal indicates this was the PRIMARY comp. 

- There is an undisclosed and ongoing financial relationship with the homebuilder and the investor who bought the model home. The investor currently leases the model home back to the homebuilder who uses the home as a model for the subject subdivision. Sale-leaseback relationship was confirmed by NVR Mortgage employee XXXX XXXX XXXX 

- In addition, the investor who bought the model home in this subdivision has bought other XXXX model homes and likely has a similar sale-leaseback relationship in at least one nearby subdivision. This was confirmed by a county records search. The investor owns the model home in the XXXX XXXX at XXXX XXXX development as well as the development my home is located. 

- The investor is an out of state buyer who was able to buy a model home from a homebuilder without the home being publicly marketed for sale. I lived in this development prior to and after the model home was sold. In addition to the ongoing financial relationship the homebuilder and investor has, there is the appearance of an undisclosed relationship outside the sale-leaseback arrangement whereby the investor is made aware of model home sales by the builder. 

- Due to the undisclosed financial relationships between the homebuilder and investor, there is the possibility and appearance the homebuilder is using the model home sale to manipulate valuations of future home sales in their developments. The parent company of the homebuilder and mortgage company has a financial incentive to use manipulated valuations. 

- It is possible, the XXXX either knowingly or unknowingly is confirming manipulated valuations by not disclosing the related transactions, as described above. Disclosing the relationships between the homebuilder, investor and mortgage company would certainly raise professional standards concerns and potentially render the appraisal inappropriate in consumer transactions. 

Appearances are everything. The above undisclosed relationships between the homebuilder, mortgage company and investor does not give me confidence consumers are being treated fairly and ethically. I also question conformance to federal consumer mortgage regulations.

Company response to consumer: Closed with explanation