The Appraisal Foundation Condemns Final Rule Raising Residential Real Estate Appraisal Threshold
For Immediate Release
August 20, 2019
(Washington, DC) – The Appraisal Foundation President David Bunton issued the following statement after the final rule exempting residential real estate transaction of $400,000 or less from appraisal requirements was approved by the Federal Deposit Insurance Corporation.
“When the proposed rule was announced in November 2018, The Appraisal Foundation sent a letter strongly encouraging the FDIC to not adopt any action. Since November, our position has only hardened. The Appraisal Foundation believes that increasing the appraisal threshold level will negatively affect safety and soundness in real estate lending practices. It will likely prompt many financial institutions to significantly reduce attention to collateral risk management. This position is supported by the Government Accountability Office (GAO) report from January 2012, where no support was found to raise the current threshold amount. In fact, that GAO report reflected stakeholder support to reduce or eliminate the current threshold. The past nine months has proven the findings of the GAO report were with merit as the wide spread opposition to the proposed rule significantly outweighed support for the rule.
“It is a sad comment that we are celebrating the 30th anniversary of Title XI of Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) this month, which was created to protect the deposit insurance fund, yet this is also the same month when another major exemption is finalized, which continues to hollow out the teeth of FIRREA.
“The Appraisal Foundation remains steadfast in its belief that an appraisal performed by a licensed or certified appraiser that complies with the Uniform Standards of Professional Appraisal Practice is a lynchpin in the proper evaluation of real estate collateral.”
The Appraisal Foundation is the nation’s foremost authority on the valuation profession. The organization sets the Congressionally-authorized standards and qualifications for real estate appraisers, and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals. This work advances the profession by ensuring appraisals are independent, consistent, and objective. More information on The Appraisal Foundation is available at www.appraisalfoundation.org.
Media Contact: David Greer
Director of Communications
The Appraisal Foundation
direct phone 202.624.3048