Appraisers' Free Forum

As a follow up to a September 8, 2009, meeting with Federal Housing Administration (FHA) Commissioner David Stevens, NAR President Charles McMillan sent a letter to the Commissioner recommending enhancements to FHA appraisal policy. As FHA considers implementing components of the Home Valuation Code of Conduct (HVCC), NAR recommends that lenders be prohibited from using an appraisal report from any appraisal management company (AMC) where the lender or the lender's affiliate maintains an ownership stake. Further, FHA should ensure that AMCs have appropriate quality control procedures in place. NAR also recommends implementing a mechanism for complaints similar to the Independent Valuation Protection Institute (IVPI) that was to be implemented along with the HVCC.

NAR also recommends eliminating the appraisal requirements for declining markets and aligning FHA appraisal requirements with those adopted by the GSEs. This will provide consistency across the real estate industry without causing harm to markets that are showing signs of improvement. Recommendations include eliminating the requirement for a second appraisal in certain markets and allowing appraisers to use comparable sales that are up to 12 months old in all markets, including declining markets.