AI Professionals Lobby to Modernize Appraisal Regulatory Process
Attendees of AI’s annual Leadership Development and Advisory Council Conference, held May 25-27 in Washington, will lobby lawmakers to hold hearings on appraisal regulation as no legislation has been introduced to address modernization or the regulatory burdens that appraisers face.
The Appraisal Institute believes that legislation is vital because the ranks of real estate appraisers have significantly declined in recent years, and AI research projects a further decline in the appraiser population over the next five to 10 years.
Key issues the Appraisal Institute want to see addressed:
- Federal regulation.Appraisers are regulated by the states, but they also face significant federal oversight and constantly evolving standards and qualifications — is direct federal oversight necessary?
- State-by-state portability.Appraisers often work in multiple states and in doing so they face increased regulatory obligations, including state-by-state background checks for renewals, reciprocity licenses and temporary practice permits in many situations.
- Uneven playing field.Where appraisals are not required by federal law, many states allow valuation services to be provided by individuals who may not be held to the same standard as appraisers. Rigid appraisal standards restrain appraisers from providing competing services for which they are the most qualified to perform.
- “Recipe” approach to appraisal.Appraisal “methods and techniques” should not be developed as a set of homogenous rules, and the valuation profession does not need additional rules and real estate industry stakeholders deserve better than to have all markets treated as the same.
- Federal agency rules.Numerous rules affecting valuation professionals have been issued by federal agencies since the passage of the Dodd-Frank Act. Such rules merit congressional oversight.
Earlier this year, the Appraisal Institute released key principles for modernizing the appraisal regulatory structure. Those principles would:
- Align appraisal regulation with the regulatory structures recently enacted by Congress for other industries, such as insurance and mortgage origination, a move that would address the issue of multistate licensing through technology or a common licensing platform.
- Explore a nationwide platform or portal for valuation professionals, those who use appraisal services and state regulators that would be used to process license applications and renewals to eliminate redundancies and regulatory burdens.
- Provide clear audit processes for state appraiser regulatory agencies, which would allow them to focus on licensing administration and enforcement.
- Establish a common platform to improve the sharing of information among state regulatory agencies.
- Improve appraisal quality by re-engaging highly qualified real estate valuation professionals.
- Authorize financial institutions to engage valuation professionals with designations and credentials that exceed minimum licensing requirements.
- Establish appropriate levels of oversight and reasonable limitations for entities authorized by Congress, which is consistent with previous congressional action.
Appraiser News Online May 25, 2016