Appraisal groups hail Sarbanes and Miller efforts

Mortgage Banking, July, 2002

THE APPRAISAL INSTITUTE, THE AMERICAN Society of Appraisers and the National Association of Realtors (Appraisal Section) have applauded the efforts of Sen. Paul S. Sarbanes (D-Maryland) and Sen. Zell Miller (D-Georgia) for their initiative to investigate mortgage and real estate consumer fraud. In a June letter, the groups hailed Sarbanes and Miller's request of the General Accounting Office (GAO) to investigate the appraisal regulatory structure. The three organizations also noted that more work needs to be done to solve the problems associated with residential mortgage fraud.

The group's letter maintained that while the intention of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), was to raise the professionalism of appraisers involved in federally related transactions, the associations believe the act has actually hindered the development of the profession, promoting only "minimum" qualifications for appraisers and failing to provide effective federal oversight of the system. Issues the coalition urges the GAO investigation to include are the conditions that allow for improper influence of appraisers by clients and third parties, such as loan originators, mortgage brokers and others with an interest in the transaction; the lack of consistent state appraiser board enforcement activities; and the failure of the Appraisal Subcommittee (federal oversight agency) to provide meaningful oversight of state appraiser boards. More information can be found at www.appraisalinstitute.org.