The four largest professional appraisal organizations have called for requirements to stress the need for an independent appraisal process in the mortgage lending process.
In an April 11 letter to the federal bank regulators the appraisal groups commented on the proposed guidance on subprime mortgage lending. Download Here (247.0K)
In their effort to safeguard consumers from shoddy subprime mortgages the agencies have overlooked the importance of selecting ethical, professional and independent appraisers,” said Don Kelly, Chief External Relations Officer for the Appraisal Institute.
“Specific guidance on appraisal management and appraiser independence cannot be emphasized enough, particularly when fraud in residential mortgage lending has grown to new heights. The agencies need to revise their statement to stress this point,” Kelly stated.
The letter came in response to a proposed “Statement on Subprime Mortgage Lending”, issued by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of Thrift Supervision, and National Credit Union Administration. The proposed statement was sent to industry leaders in the lending, mortgage and real estate fields.
We can’t stand by while those with a vested interest in a transaction try to use appraisers as a rubber stamp,” noted Kelly. “Additionally, to address this debilitating problem for lenders and consumers, we need help from the entire real estate community to develop and accept an industry-wide statement of ‘best practices’ on real estate appraisal and mortgage lending. With that we start to educate and commit all parties to the importance of an independent appraisal process.”
- The full letter is available:Download Here(247.0K)
- Appraisal Institute - Click here.
- See Ken Harvey's Article: Appraisers seek curbs on lender pressure - click here
- The proposed guidance is available at : www.federalreserve.gov/BoardDocs/press/bcreg/2007/20070302/attachment.pdf
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