Appraisal Oversight: the Regulatory Impact on Consumers and Businesses
Appraisal Oversight: The Regulatory Impact on Consumers and Businesses Testimony of Sara W. Stephens, MAI, CRE Before the Subcommittee on Insurance, Housing and Community Opportunity House Committee on Financial Services June 28, 2012 1 June 28, 2012 Madam Chairman Biggert, Ranking Member Gutierrez, and members of the Subcommittee on Housing and Community Opportunity, thank you for the opportunity to share our concerns regarding “Appraisal Oversight: The Regulatory Impact on Consumer and Businesses” on behalf of the more than 23,000 members of the Appraisal Institute, the largest professional association of real estate appraisers in the United States. Today, residential appraisers face ever-mounting challenges that place the future of residential appraisal at risk. The appraisal regulatory structure has become almost entirely a “rules-based,” as opposed to a “principles- based,” system. As such, it has become a burden to appraisers and, in our view, has failed to improve overall appraisal quality or appraiser oversight and enforcement. While appraising arguably is the most heavily regulated activity within the mortgage and real estate sectors, we warn Congress that a new and excessive regulatory regime is on the cusp of being enacted by appraiser regulatory agencies without Congressional review or authorization. This is a dangerous and unjustified move that risks hamstringing and jeopardizing the real estate appraisal profession altogether. At a very basic level, the appraiser regulatory structure lacks fundamental accountability measures. In its report to Congress, the Government Accountability Office identified significant violations of internal control standards by entities that claimed such standards were designed to promote effectiveness and efficiency, and to promote accountability.
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