Four of the largest organizations for real estate appraisers are asking bank regulators to consider requirements stressing the need to enforce an independent appraisal process in mortgage lending.
“We can’t stand by while those with a vested interest in a transaction try to use appraisers as a rubber stamp,” stated Don Kelly, a spokesman for the Appraisal Institute. “In their effort to safeguard consumers from shoddy subprime mortgages the agencies have overlooked the importance of selecting ethical, professional and independent appraisers.”
He added, “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 Appraisal Institute, American Society of Appraisers, American Society of Farm Managers and Rural Appraisers and National Association of Independent Fee Appraisers sent a letter 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 (see Inman News article).
The Appraisal Institute is an international membership association of professional real estate appraisers, with about 22,000 members.
Also in response to the subprime crisis, the National Association of Realtors trade group this week sent a letter to U.S. Department of Housing and Urban Development Secretary Alphonso Jackson urging HUD “to act quickly to change the FHA mortgage insurance program to enable more homeowners and their families to keep their homes.”
“Many homeowners who were able to make timely payments under the original terms of their loan are finding it difficult to make payments after rate adjustments,” NAR president Pat Vredevoogd Combs stated in a letter to Jackson. “We believe FHA can design a mechanism where creditworthy borrowers could refinance subject to prudent guidelines, and therefore avoid losing their homes.
“We believe that with some minor regulatory adjustments to the FHA program that a significant subset of borrowers facing the prospect of foreclosure could safely refinance into an FHA mortgage.”
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