U.S. bank regulators are proposing rules that seek to increase the qualifications of appraisers and “attempt to overhaul the appraisal industry to ensure that those assessing a home’s value have no hidden financial ties to lenders that could influence assessments,” The Wall Street Journal reports.
The Office of the Comptroller of the Currency, the Federal Reserve, and other regulators are proposing that federally regulated banks who hire appraisal management companies only use state-licensed appraisers with “the requisite education, expertise, and experience necessary” to complete appraisals competently, The Wall Street Journal reports. The regulators’ proposal also seeks to get states to become more diligent in regulating appraisal management companies, such as by setting up systems to investigate and discipline the companies.
Under the proposal, federally regulated banks would no longer be able to work with appraisal management companies in states that do not have such a regulatory system in place.
Source: “Regulators Target Home Appraisals,” The Wall Street Journal (March 24, 2014)