federal housing finance agency (FHFA) will host evaluation subcommittee (ASC) for its second public hearing on valuation bias in May.
Thank you for reading this post, don't forget to subscribe!The housing regulator, led by Sandra Thompson, said it would look at the current regulatory framework for the industry, with a particular focus on standards, qualification criteria, barriers to entry into the profession and assessment practices.
ASC Executive Director Jim Park said in a prepared statement, “Based on the public comments received and information gathered during the first hearing, it was clear that the regulatory assessment as a whole needed to provide the necessary context for any discussion of bias.” Additional information on the system was needed.” statement. “This is an opportunity to broaden our understanding of the issues facing the appraisal industry today and gain a clearer picture of how current practices and the appraisal regulatory system impact lending in this country.”
At the first ASC hearing in January, consumer financial protection bureau (CFPB) director Rohit Chopra took aim at the dysfunctional regulatory system governing the appraisal industry.
“I think a lot of people don’t understand how this Byzantine system works,” Chopra said. He called for dismantling the system and building it from scratch.
A report commissioned by the Evaluation Subcommittee in 2021 and led by National Fair Housing Alliance Found that the industry has been allowed to regulate itself, a rarity in the heavily regulated housing and mortgage industries.
The authors wrote, “Until recently … the appraisal industry has escaped the type of regulation and scrutiny faced by other participants in the mortgage market.” “Our analysis shows that the valuation industry operates in a relatively closed, self-regulated framework.”
that report criticized Valuation Foundation, an industry-driven non-profit organization that sets both standards and criteria for appraisers. The foundation’s boards are filled with representatives from appraisers, lenders, banking institutions and industry trade groups, but there are no consumer or fair housing advocates on the board.
The ASC is responsible for monitoring and reviewing nonprofits, but has no enforcement authority.
Government reports have also questioned the high barriers to entry in the profession, particularly as it requires a college degree and up to 3,000 supervised experience hours.
The White House recently marked the one-year anniversary since the Interagency Task Force on Property Appraisals and Appraisal Equity (PAVE) released its action plan to prevent instances of bias in the housing appraisal process.
And fannie mae Recently said appraisals were no longer the default standard, which could fundamentally change the way property is appraised in the US housing market in the future.
