Members of AI Urge Congressional Action on 3 Bills
Nearly one hundred members of the Appraisal Institute went to Capitol Hill May 23 to urge Congress to act on three bills that could significantly impact the valuation profession.
Attendees of AI’s annual Leadership Development and Advisory Council, held May 22-24 in Washington, D.C., lobbied lawmakers and their staffs on S. 3047, the Expanding Homeowners Refinancing Act; H.B. 3461/S. 2160, the Financial Institutions Examination Fairness and Reform Act; and S. 3085, the Responsible Homeowner Refinancing Act of 2012.
S. 3047 builds on President Obama’s proposal — announced during his 2012 State of the Union address — that home loans not funded by the government-sponsored enterprises be financed through the Federal Housing Administration without appraisals. Such a move would involve “new risk” to FHA and would run counter to existing appraisal requirements. As introduced by Sen. Diane Feinstein, D-Calif., the bill would implement parts of the president’s proposal but retain an FHA appraisal requirement.
Appraisal Institute members encouraged lawmakers to support retention of the appraisal requirements for any program that involves new risk to FHA.
AI members also expressed their concerns about H.R. 3461/S. 2160, and urged Congress to amend the proposed bill in order to make it consistent with federal regulations.
Introduced by Rep. Shelley Capito, R-W.Va., and Sens. Jerry Moran, R-Kan., and Joe Manchin, D-W.Va., H.R. 3461/S. 2160 is intended to promote consistency of bank examinations and due process and to enhance consistency in the interpretation and understanding of bank examination guidelines and regulations. While the Appraisal Institute supports the bill’s intent, AI members expressed concern about Sec. 1013(a)(3), which would prohibit any reappraisal of a performing loan even if examiners identified safety and soundness concerns. Bank examiners currently have the right to order new appraisals to protect safety and soundness, and AI members urged Congress to allow banks to continue ordering reappraisals as needed.
While on the Hill, Appraisal Institute members also lobbied Congress on S. 3085, stressing the importance of allowing the government-sponsored enterprises to order appraisals as necessary, a provision that could be eliminated through legislation introduced by Sens. Robert Menendez, D-N.J., and Barbara Boxer, D-Calif. As introduced, the bill would waive appraisals for GSE refinancing and instead encourage use of automated valuation models. AI members took the position that such a move diminishes the importance of appraisers and the professional skill and experience they provide.