Industry News

AP: Monitoring of appraisers ineffective

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A nationwide system set up to monitor appraisers in the wake of the savings and loan crisis did little to prevent appraisers, real estate agents and mortgage brokers from colluding to inflate home prices during the housing boom, the Associated Press said in reporting the results of a six-month investigation. An independent federal agency authorized by Congress in 1989, the Appraisal Subcommittee, is charged with conducting field reviews and audits of appraisers. But the Appraisal Subcommittee has only four auditors and has not had a permanent director since the end of last year, AP said. The Appraisal Subcommittee is charged with keeping records to aid state appraisal boards in identifying and disciplining rule breakers. But many state appraisal boards have failed to conduct timely investigations or resolve complaints, and federal regulators are effectively powerless over the states, AP concluded. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 re...