Life After Dodd-Frank
Do the agencies’ appraisal regulations apply to FHA, VA…
Republican control of Washington DC will mean one of two things:
- A scaling back of Dodd-Frank, or
- The elimination of Dodd-Frank
Like it or not, one of these two scenarios will play itself out in 2017 or 2018.
What about AMCs?
The AMC Final Rule was deemed that…the registration and supervision of AMCs is voluntary, and that a State may elect not to establish such a program for any reason, including if its resources do not support such a program.
Will the states walk away from AMC regulation? Perhaps not all, but definitely some states will either bypass the registration and licensing of AMCs or may repeal their existing regulations.
The question becomes, what happens to AMCs who are no longer regulated?
Nothing. AMCs will continue to operate whether there are regulations or not. If AMCs are not regulated in a state, won’t that affect their ability to process federally related transactions? About 4% of all residential transactions fall into this category and yet, no one is quite clear which transactions those are.
Appraisers treat every assignment as if it was a federally related transaction even though 96% do not fall into this category. Remember, AO-30 in USPAP discusses what is and what is not an FRT:
What is a “federally related transaction”? The term is defined in Title XI of FIRREA as “any real estate-related financial transaction which —
(A) a federal financial institutions regulatory agency or the Resolution Trust Corporation engages in, contracts for, or regulates; and
(B) requires the services of an appraiser.”
The agencies’ appraisal regulations define when the services of an appraiser are required. The agencies’ appraisal regulations also list specific categories of transactions that do not require the services of an appraiser.
Do the agencies’ appraisal regulations apply to FHA, VA, Fannie Mae, Freddie Mac, Farmer Mac, or Sallie Mae?
FHA, VA, Fannie Mae, Freddie Mac, Farmer Mac and Sallie Mae are not under the supervision of the federal financial institutions regulatory agencies and therefore are not subject to their appraisal regulations.
That’s pretty much everything residential appraisers do, isn’t it? Do you think that it makes sense to continue to regulate a profession that consists of 4% of the entire market for services?
The Resolution Trust Corporation was shut down in December of 1995.
By Brian Weaver, Coordinator Editor of IllinoisAppraiser, Appraisal Management Company Coordinator for the Illinois Department of Financial and Professional Regulation (IDFPR) – Illinois Appraiser Newsletters – Volume 10, Issue 1 – January 2017