Housing Finance & Regulatory Affairs

David L. Ledford

Senior Vice President

November 29, 2012

Appraisal Subcommittee

Attn: Lori Schuster

1401 H Street NW, Suite 760

Washington, DC 20005

Re: Appraisal Subcommittee; Proposed Policy Statements

Docket No. AS12-16

Dear Ms. Schuster: 

On behalf of the National Association of Home Builders (NAHB), I would like to submit 

comments on the Appraisal Subcommittee’s (ASC) request for comment on their 

Proposed Policy Statements. NAHB is a Washington-based trade association 

representing more than 140,000 member firms involved in a wide variety of 

businesses related to housing and home building. 

The proposed Policy Statements provide guidance to ensure State appraiser 

regulatory programs (Program) comply with Title XI of the Financial Institutions 

Reform, Recovery and Enforcement Act of 1989, as amended. The proposed Policy 

Statements would supersede the current ASC Policy Statements.

The present economic situation has brought to the forefront the importance of 

effective appraiser guidance and regulation. NAHB is committed to addressing the 

systemic appraisal issues that the housing industry experienced both before and 

after the housing crisis. 

Since 2009, NAHB has convened five Appraisal Summits, with the most recent 

Summit held on October 24, 2012. NAHB’s Appraisal Summits bring together

representatives of major housing and financial institution stakeholders, appraisal 

organizations, and federal housing and banking regulators to discuss appraisal 

problems and solutions. We appreciate the participation of ASC’s Executive Director, 

members, and their representatives at the Summits. There has been broad 

agreement at the Summits that the stakeholder organizations should work together to 

address the critical appraisal issues that remain a major impediment to the housing 

recovery and, therefore, finding solutions to these problem continues to be a major 

priority for NAHB.

Background

Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, 

as amended (Title XI), established the Appraisal Subcommittee. The purpose of Title 

XI is to provide protection of federal financial and public policy interests by upholding 

Title XI requirements for appraisals performed for federally related transactions. 
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Pursuant to Title XI, the ASC performs periodic Compliance Reviews of each State’s Program to 

determine its compliance, or lack thereof, with Title XI, and to assess its implementation of the 

Real Property Appraiser Qualification Criteria (AQB Criteria), as adopted by the Appraiser 

Qualifications Board (AQB). 

The ASC originally adopted the Policy Statements in 1993 and in 1997 added Policy Statements 

governing temporary practice and reciprocity. Since 1997 the Policy Statements have remained 

largely unchanged. Two recent occurrences necessitated revision of the Policy Statements:

 Passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 

Act); and

 ASC implementation of its revised Compliance Review process in 2009.

The proposed Policy Statements are intended to provide States with the necessary information 

to maintain their Programs in compliance with Title XI. The proposal also excludes provisions 

from the current Policy Statements that have become outdated or lack enforceability. 

Additionally, the proposal reflects consideration of recent amendments to the Uniform Standards 

of Professional Appraisal Practice (USPAP) and the AQB Criteria.

In January 2012, The Government Accountability Office (GAO) released a report, “Real Estate 

Appraisals – Appraisal Subcommittee Needs to Improve Monitoring Procedures”. The report 

identified several weaknesses that have limited the ASC’s effectiveness, including weak 

enforcement tools and reporting procedures; and, inadequate policies and procedures for 

monitoring appraisal requirements. NAHB believes the proposed Policy Statements are a step 

toward resolving many of the deficiencies identified by the GAO. Our comments on the specific 

Policy Statements follow. 

Policy Statement 1: Regulations, Policies and Procedures Governing State Programs.

NAHB supports the preservation of essential language concerning independence and ethical 

standards with deference given to State standards. States should retain primary responsibility 

for certifying and overseeing appraisers and the quality of their work. Enforcement actions 

against licensees should continue to occur at the State level. Federal policy should dictate that 

disciplinary actions are meted out in a consistent manner.

Recognizing the primacy of State rights, NAHB believes that the States would greatly benefit 

from more prescriptive direction and enforcement from the ASC that would better integrate, 

consolidate and streamline the jumble of existing policies generated independently at the state 

level. This would contribute to uniform and consistent standards and avoid the current multitude 

of conflicting and confusing requirements which creates inefficiencies, duplicated efforts and 

additional cost burdens for the states.

NAHB strongly supports the authority granted to the ASC, by the Dodd-Frank Act, to review 

State Programs for adequate funding and staffing. States must have an independent appraisal 

board with funding from license activities, fines and where appropriate grants from the ASC. 

States should be forbidden from commingling appraisal license fees with other general funds

and absolutely forbidden form sweeping any funds supplied through the ASC as grants.
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NAHB supports the amendment to the current Policy Statement’s discussion on prohibiting 

discrimination against appraisers with or without membership in a nationally recognized 

professional appraisal organization. However, NAHB recognizes the importance of developing 

an appraisal organization that would represent the broadest possible range and number of 

appraisers because the appraisal profession appears to be the most fractured group under the 

real estate umbrella. Unfortunately, most appraisers belong to no organization, leaving 

appraisers with little to no representation. Without representation, appraisers are profoundly 

powerless to be involved in effecting change within their own profession. 

Policy Statement 2: Temporary Practice

NAHB supports the recognition, on a temporary basis, the certification or license of an out-ofstate appraiser entering a state and not being subjected to excessive fees or burdensome 

requirements, for the purpose of completing an appraisal assignment. It is equally important to 

ensure the out-of-state appraiser’s competency meets or exceeds the requirements of the 

assignment. 

Policy Statement 3: National Registry

ASC’s National Registry is a critical tool providing industry stakeholders accurate and timely 

information to determine who is and, just as importantly, who is not eligible to perform 

appraisals in federally related transactions. Having real time data regarding the issuance and 

renewal of licenses and certifications, sanctions, disciplinary actions, revocations and 

suspensions provides industry stakeholders due diligence tools to ensure the integrity of 

appraisers and the appraisal process.

NAHB does have concerns, however, that not all States are expeditiously reporting actions, 

including disciplinary actions, to the National Registry. NAHB would recommend the ASC 

develop very specific processes and procedures with timelines in which the States must comply. 

ASC grants could assist States if it is determined that they do not have adequate resources. 

NAHB also recommends that the ASC maximize the information sharing benefits and integrity of 

the National Registry by identifying ways to increase standardization and functionality of the 

National Registry.

Policy Statement 5: Reciprocity

NAHB supports establishing uniform credentialing standards that would be applied across all 

jurisdictions. A strong federal standard would support managing reciprocal credentials providing 

efficiencies for states. Reciprocity should be automatic provided the appraiser license status is 

in good standing. NAHB suggests additional clarification on how reciprocity would occur with 

States that are in a Poor or Non-Compliance status. Notice of disciplinary actions imposed 

upon appraisers should be made available to any and all parties charged with engaging an 

appraiser.

Policy Statement 7: State Agency Enforcement

NAHB supports a timely enforcement process to ensure that States are processing and 

investigating complaints to ensure effective supervision of appraisers. The process must 
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incorporate and enforce definitive penalties and remove incompetent appraisers from the pool

when appropriate.

The single largest complaint of NAHB members is the lack of a standard for appeals on an 

appraisal. The current enforcement process does nothing with regard to a pending transaction.

NAHB supports the establishment of a timely value dispute resolution process that is fair, 

balanced and appropriate to allow interested parties to appeal appraisal values when appraisal 

assumptions are incorrect. An appeals structure similar in design to that of the Department of 

Veterans Affairs Loan Guaranty Service Home Loan Program should be considered.

Policy Statement 8: Interim Sanctions

NAHB supports the Dodd-Frank Act in providing the ASC with the authority to impose interim 

actions and suspensions, as an alternative to a non-recognitions proceeding against a State. 

This is an important step forward for the ASC’s enforcement and oversight of State Programs.

Conclusion

NAHB remains committed to working with ASC, and other industry stakeholders to address the 

problems in the current U.S. appraisal system. Again, we appreciate the opportunity to 

comment. Please contact Steve Linville, NAHB’s Director, Single Family Finance, at 202-266-

8597 with any questions you may have regarding this letter.

Sincerely, 

David L. Ledford