Appraisal Institute Issues Legislative Update
April 7, 2008 08:00 AM
WASHINGTON, DC (April 7, 2008) – Today, the Senate will vote on critical legislation to stimulate the housing market and the economy. Included in the debate is an amendment offered by Senator Robert Casey (D-Pennsylvania) and Senator Mel Martinez (R-Florida) to make reforms to the real estate appraisal process, specifically, banning appraiser coercion.
The independence of the real estate appraisal process is crucial to the safety and soundness of our real estate financing system, and accurate real estate appraisals protect both lenders and consumers in mortgage transactions. Unfortunately, real estate appraisers too often are pressured by mortgage brokers, mortgage lenders, appraisal management companies, realty agents and others with a vested interest in the transaction to produce false or artificial appraisals. This practice must stop. As the largest professional organization of real estate appraisers in the United States, we support this amendment, applaud its bipartisan approach, and urge its immediate passage.
Further, we call on Congress to immediately enact reforms to the appraisal regulatory structure established in 1989 by Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). The existing appraisal regulatory structure is underfunded and lacks the enforcement powers necessary to adequately oversee the more than 100,000 licensed and certified real estate appraisers in the United States. With ineffective federal oversight and a patchwork of state laws, which in some cases require only “minimum” qualifications for licensing and certification, state and federal oversight bodies too often have not carried out their specific intended responsibilities to enforce the standards as required by the federal law. These deficiencies were identified last week in the “Blueprint for Financial Regulatory Reform,” published by the U.S. Department of the Treasury, referring to the existing structure as “draconian and un-calibrated.”
Last year, the House of Representatives passed legislation (H.R. 3915) on a bipartisan basis to reform Title XI of FIRREA, which would provide more resources to state appraisal boards and grant expanded oversight and enforcement powers to the Appraisal Subcommittee. We strongly believe that these reforms will help improve the regulation of real estate appraisers, and we urge their immediate enactment.
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The Appraisal Institute is a global membership association of professional real estate appraisers, with nearly 24,000 members and 91 chapters throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. For more information regarding the Appraisal Institute, please visit www.appraisalinstitute.org.