Much Rejoicing as Financial Reform Bill Passes

The Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping financial regulatory reform bill that includes the first modernization of real estate appraisal regulations in more than 20 years, has passed through the Senate, and now awaits President Obama’s signature to become law.

“This bill will mean good news for consumers because they should see more reliable home appraisals,” said president of the Appraisal Institute Leslie Sellers. “It will encourage the use of highly trained and competent real estate appraisers, and will provide much-needed resources for oversight and enforcement.”

The Dodd-Frank Act is the first overhaul of appraisal regulations since the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989. The House passed the bill on June 30, 2010, and President Obama is expected to sign it into law shortly.

The Dodd-Frank Act will require that “reasonable and customary” fees be paid to real estate appraisers. Appraisers have complained that with the growth of appraisal management companies (AMCs) since the passing of the Home Valuation Code of Conduct (HVCC) in May 2009, they have experienced sharply reduced fees from these appraisal management companies. “Reasonable and customary” fees will reflect what the appraiser would typically be paid for the assignment without an AMC. Under the new act, violations of this policy will result in severe penalties.

By: Present Value

Additional reading:

The Dodd-Frank Wall Street Reform and Consumer Protection Act
Mortgage Players Look to Soften Bill

Tags: AMC, Appraisal Institute, Dodd-Frank Wall Street Reform, FIRREA, HVCC
Posted in Real Estate Appraisal | 1 Comment »

The Dodd-Frank Wall Street Reform and Consumer Protection Act

In our recent blog post, “Mortgage Players Look to Soften Bill,” we wrote about a new real estate bill – the Dodd-Frank Wall Street Reform and Consumer Protection Act, known simply as HR 4173 – that Congress was working on, and how mortgage lenders were hoping that some of the provisions in the bill would be adjusted to improve the state of the real estate appraisal industry.

Well, the final version of the bill is ready for a vote, and the real estate appraisal community is applauding the new measures, which are the first modernization of U.S. real estate appraisal regulations since the Financial Institutions Reform Recover and Enforcement Act (FIRREA) was enacted in 1989.

“We applaud the conference committee’s efforts and urge Congress to pass HR 4173,” said Appraisal Institute President Leslie Sellers. “We are extremely pleased that this bill will protect consumers by encouraging the use of highly trained and competent real estate appraisers with much-needed resources for oversight and enforcement.”

If passed, the measure would:

• Establish a federal appraisal independence standard, sunsetting the HVCC
• Require AMCs to register with state agencies
• Enhance appraiser competency provisions, including clarification regarding consideration of professional appraisal designations
• Provide financial resources for oversight and enforcement

The vote is slated to take place sometime in July.

By: Present Value

Additional Reading:

HVCC and Uncertainty

Pointing Fingers

HVCC: The Comp Check Killer

Tags: Appraisal Institute, Dodd-Frank Wall Street Reform, FIRREA, HR 4173, HVCC
Posted in Real Estate Appraisal | 1 Comment »