The Appraisal Institute recently participated on a conference call with staff of key federal agencies – including the Federal Deposit Insurance Corporation, Federal Housing Finance Agency and Consumer Financial Protection Bureau – to discuss rules resulting from the Dodd-Frank Act that address:
- When interior inspection appraisals are required in “higher-cost” (i.e., subprime) mortgages;
- When second appraisals are required for properties sold within 180 days;
- Minimum operating and state registration requirements for AMCs and reporting obligations to the National Registry maintained by the Appraisal Subcommittee; and
- Development of quality control standards for automated valuation models (AVMs).
The Appraisal Institute emphasized that interior inspection appraisals are the “gold standard” within the industry. The Dodd-Frank Act provision sought to quell use of drive-by and desktop appraisals in higher risk mortgages. It also sought additional collateral risk assessment to combat property flipping. The Appraisal Institute strongly supports these provisions. [Read more…]