Appraisal Institute Urges Congress to Address Valuation Issues
The president of the Appraisal Institute, the nation’s largest professional association of real estate appraisers, encouraged Congress to act on valuation topics during today’s hearing on Capitol Hill.
Stephen S. Wagner, MAI, SRA, AI-GRS, told the House Financial Services Committee’s Housing, Community Development and Insurance Subcommittee that the Appraisal Institute supports passage of H.R. 2852, which would allow licensed appraisers to perform appraisals for Federal Housing Administration loans.
“We support this bill because it addresses long-standing concerns about the implementation of pre-existing FHA appraisal requirements, which are unique and differ from those of the GSEs [Freddie Mac and Fannie Mae] and the conventional market,” Wagner’s written testimony said.
Wagner also said the Appraisal Institute supports the intent of draft legislation to address fees established by the Appraisal Subcommittee. The discussion draft would authorize less burdensome formulas for appraisal management company registry fees.
Wagner noted that the discussion draft includes a provision that the Appraisal Institute recommends and strongly supports – to require full disclosure of appraisal management companies’ fees and appraisers’ fees by separating them on the homebuyer’s Closing Disclosure Form. “This provision would … increase consumer awareness around the appraisal process,” his written testimony said.
Wagner made other legislative recommendations during the hearing, titled “What’s Your Home Worth? A Review of the Appraisal Industry.” They included:
- Remove appraisal from the zero-tolerance bucket under the Truth in Lending Act’s and Real Estate Settlements Procedures Act’s Integration Disclosure rules, known as TRID.
- Establish parameters around rulemaking pursuant to the Economic Growth and Paperwork Reduction Act process.
- Authorize the Appraisal Subcommittee to serve as a “negotiated rulemaking committee” to establish consistent and flexible lender guidelines relating to appraisals that would address issues such as inactive or limited markets where there is an absence of comparable sales.
- Reform the nation’s appraisal regulatory structure by establishing a nationwide licensing system for appraisers, where appraisers could find “one-stop shopping” for appraiser license application and renewals.