Appraisal Subcommittee is ground zero in Washington for appraisal rules

You pay $25 a year to fund Appraisal Foundation grants, federal oversight of state appraisal boards, and the Appraisal Subcommittee national appraiser registry. You should make sure your investment is working for you by checking the registry – click on the previous link – periodically to be sure your license information is correct.  Your clients do.

What is the Appraisal Subcommittee (ASC)? What is it a subcommittee of?

Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) created an Appraisal Subcommittee of the Federal Financial Institutions Examination Council (FFIEC) to oversee state appraisal regulation and the Appraisal Foundation and its boards, the Appraisal Standards Board (ASB) and the Appraiser Qualifications Board (AQB).

The agencies represented on the ASC are the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), National Credit Union Administration (NCUA) and the Department of Housing and Urban Development (HUD). Each of the six members is designated by the head of his or her agency, serve at the discretion of their agency heads and have no set term.

Beyond all the alphabet soup, FIRREA also empowered ASC member agencies to adopt regulations regarding appraisals made in connection with “federally related transactions,” namely, those supporting underwriting decisions of a federally insured bank, mortgages purchased by Fannie Mae or Freddie Mac, and the like.

The famed, and sometimes reviled, “de minimus” rule – stating that appraisals generally aren’t required for mortgages under $250,000 – is such a regulation.  Earlier this year, these rules were opened up for public comment on ways to reduce regulatory burdens on insured institutions.  Among comments received was this lender’s suggestion that the de minimus be raised to $500,000.

The lesson is that regulations are often “in play,” because in practice they’re easier to change, and present more frequent opportunities for reform, than laws.  The biggest lenders have legal departments and subscribe to services that keep them on top of developments and opportunities.  Thus far, the appraisal profession hasn’t had as effective an advocate.

We’re going to be talking about appraisal advocacy issues and challenges at our second annual Winter Convention in Las Vegas January 16-18. There are ways that working together we can step up to the plate in Washington and effect positive change for appraisers everywhere.  Stay tuned and register now to learn more.