House Approves Real Estate Valuation Fairness Legislation

The House Financial Services Committee on April 20 approved HR 2553, the Real Estate Valuation Fairness and Improvement Act, legislation that would establish an interagency task force to analyze federal collateral underwriting standards and guidance, and provide resources for promoting diversity within the valuation profession. The bill now moves to a full House vote, but no date has been set.

Introduced by Reps. Emanuel Cleaver, D-Mo., and Ritchie Torres, D-N.Y., the Real Estate Valuation Fairness and Improvement Act would form a task force consisting of stakeholders who would identify best practices and help develop more consistent policies and procedures for the agencies and entities regulating residential and commercial real estate valuations. Items under review could include appraisals; automated valuation models; the procedures for managing reconsideration of value by consumers; and common collateral underwriting challenges, such as energy-efficient housing and inactive markets.

The legislation also would direct the task force to study potential racial disparities within lending and valuation, and investigate any barriers to entry that disproportionally effect minorities from starting a career as a valuation professional — the minimum requirements established by the Appraiser Qualifications Board is one item that will be explored. The legislation also would direct the Appraisal Subcommittee to establish a program to make grants available to state agencies, nonprofit organizations and institutions of higher education to promote diversity and inclusion within the valuation profession.

The Appraisal Institute backs this legislation, and submitted its letter of supportto House Financial Services Committee Chairwoman Maxine Waters and Ranking Member Patrick McHenry in March.