Washington, DC – Today, in reaction to the Consumer Financial Protection Bureau’s (CFPB) release of new appraisal rules, NCRC President and CEO John Taylor made the following statement:
“The CFPB’s new appraisal rules promote transparency and fairness for consumers. In a step that NCRC has long called for, all consumers will now receive copies of appraisals and automated valuation model (AVM) reports and will be able to check them for errors. Further, consumers and industry alike will benefit from the use of responsible valuation professionals in high cost loan origination. We are very pleased that the CFPB has taken our recommendations in this area.”
“One of the most overlooked elements of the housing and economic crisis is the role that inflated appraisals played. Research shows that 90% of appraisals during the height of the period of irresponsible, toxic lending were improperly and illegally influenced by lenders. Conversely, since the onset of the crisis home values have been overly deflated. The new disclosure requirements help immensely with both of these problems.”
“In addition to the steps they have taken thus far, the CFPB and the other regulators should undertake additional rulemaking to better regulate the activities of Appraisal Management Companies (AMCs), and to create a true arms length between originators and appraisers, which is already required by law but largely ignored.”
In June of 2012, NCRC Chief Program Officer David Berenbaum testified on appraisal oversight before the United States House of Representatives Committee on Financial Services.
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development and vibrant communities for America's working families. To find out more, visit http://www.ncrc.org