REAL ESTATE 

APPRAISALS

Appraisal 

Subcommittee Needs 

to Improve Monitoring 

Procedures

Report to Congressional Committees

January 2012

GAO-12-147

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-147, a report to 

congressional committees 

January 2012

REAL ESTATE APPRAISALS

Appraisal Subcommittee Needs to Improve 

Monitoring Procedures

Why GAO Did This Study

Real estate appraisals have come 

under increased scrutiny in the wake of 

the recent mortgage crisis. Title XI of 

the Financial Institutions Reform, 

Recovery, and Enforcement Act of 

1989 created an oversight structure for 

appraisals and appraisers that involves 

state, federal, and private entities. This 

structure includes ASC, a federal 

agency responsible for monitoring 

these entities’ Title XI-related activities.

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act (DoddFrank Act) expanded ASC’s Title XI

role and required GAO to examine 

ASC’s activities and exemptions to 

federal appraisal requirements. This 

report discusses (1) how ASC is 

carrying out its original Title XI

responsibilities, (2) ASC’s actions and 

plans to implement Dodd-Frank Act 

provisions, and (3) regulatory dollar

thresholds for determining when an 

appraisal is required. To do this work, 

GAO reviewed ASC records and 

reports, surveyed state appraiser 

regulatory agencies, analyzed 

government mortgage data, and 

interviewed industry stakeholders.

What GAO Recommends

To help ensure effective

implementation of ASC’s original Title 

XI and additional Dodd-Frank Act 

responsibilities, ASC should clarify and 

report the criteria it uses to assess 

states’ overall compliance with Title XI

and develop specific policies and 

procedures for its other monitoring

functions. GAO provided a draft of this 

report to ASC and seven other 

agencies. ASC and two other agencies 

agreed with the report’s

recommendations. One agency did not 

comment on the recommendations, 

and the others did not provide written 

comments.

What GAO Found

The Appraisal Subcommittee (ASC) has been performing its monitoring role

under Title XI, but several weaknesses have potentially limited its effectiveness.

For example, Title XI did not originally provide ASC rulemaking and enforcement 

tools that could be useful in promoting state compliance. In addition, ASC has not 

reported or clearly defined the criteria it uses to assess states’ overall compliance 

levels. Title XI charges ASC with monitoring the appraisal requirements of the 

federal financial institutions regulators, but ASC has not defined the scope of this 

function—for example, by developing policies and procedures—and its 

monitoring activities have been limited. ASC also lacks specific policies for 

determining whether activities of the Appraisal Foundation (a private nonprofit

organization that sets criteria for appraisals and appraisers) that are funded by

ASC grants are Title XI-related. Not having appropriate policies and procedures

is inconsistent with federal internal control standards designed to promote 

effectiveness and efficiency and limits the accountability and transparency of 

ASC’s activities. 

ASC faces potential resource and planning challenges in implementing some 

Dodd-Frank Act provisions. ASC has only 10 staff and is funded by appraiser 

registration fees that totaled $2.8 million in fiscal year 2010. The Dodd-Frank Act 

expands ASC’s responsibilities and authorities. For example, the act requires 

ASC to establish a national appraiser complaint hotline and provide grants to 

state appraiser regulatory agencies, and it gives ASC limited rulemaking and 

enhanced enforcement authorities to help address prior weaknesses. As of 

October 2011, ASC had completed several implementation tasks that required no 

rulemaking or creation of new programs and was in various stages of progress 

on the others. The potentially resource-intensive nature of some remaining tasks 

will require careful planning. For example, operating a complaint hotline may 

require investments in information technology and the creation of screening and 

follow-up procedures. Also, implementing a grant program will require ASC to set 

aside funds, develop funding criteria, and oversee grantees. ASC is in the 

process of developing a strategic plan to help carry out these efforts with 

available resources. 

GAO found that more than 70 percent of residential mortgages made from 2006 

through 2009 were $250,000 or less—the regulatory threshold at or below which 

appraisals are not required for transactions involving federally regulated lenders. 

In recent years, however, the threshold has had a limited impact on the 

proportion of mortgages with appraisals because mortgage investors and 

insurers such as Fannie Mae, Freddie Mac, and the Federal Housing 

Administration have generally required appraisals for mortgages both above and 

below the threshold. While these entities currently dominate the mortgage 

market, federal plans to scale them back could lead to a more privatized market, 

and whether this market would impose similar requirements is not known. None 

of the appraisal industry stakeholders GAO spoke with argued for increasing the 

threshold. Some stakeholders said the threshold should be lowered or 

eliminated, citing potential benefits to risk management and consumer protection.

Others noted potential downsides to lowering the threshold, such as requiring

more borrowers to pay appraisal fees and requiring appraisals on more

transactions for which cheaper and quicker valuation methods may be sufficient.

View GAO-12-147. To view the e-supplement, 

click GAO-12-198SP. For more information, 

contact William B. Shear at (202) 512-8678 or 

shearw@gao.gov. 
Page i GAO-12-147 Appraisal Subcommittee 

Letter 1 

Background 4

Several Weaknesses Have Potentially Limited ASC’s Effectiveness 

in Performing Its Title XI Functions 10

Dodd-Frank Act Provides ASC New Authorities and Presents 

Implementation Challenges 26

Most Recent Mortgages Were Below the Threshold for Appraisal 

Exemption, and Stakeholder Views on the Threshold Vary 34

Conclusions 40

Recommendations for Executive Action 41

Agency Comments and Our Evaluation 41

Appendix I Objectives, Scope, and Methodology 43

Appendix II Data on the Number of Appraiser Credentials and State Enforcement 

Actions Against Appraisers 49

Appendix III Potential Benefits and Challenges of a National Appraisal 

Repository for ASC 54

Appendix IV Status of ASC Tasks Stemming from the Dodd-Frank Act 57

Appendix V Comments from the Appraisal Subcommittee 59

Appendix VI Comments from the Consumer Financial Protection Bureau 61

Appendix VII Comments from the National Credit Union Administration 63

Contents
Page ii GAO-12-147 Appraisal Subcommittee 

Appendix VIII Comments from the Office of the Comptroller of the Currency 65

Appendix IX GAO Contact and Staff Acknowledgments 66

Tables

Table 1: ASC’s Tools for Monitoring State Compliance with Title XI 

Requirements 12

Table 2: Number and Type of Noncompliance Findings Identified in 

ASC’s State Compliance Reviews, 2007-2010 14

Table 3: Active Appraiser Credentials, by State and Type, as of 

December 31, 2010 49

Table 4: Number and Types of Appraiser Disciplinary Actions 

Reported by States, 2001-2010 51

Table 5: Summary Description and Status of ASC Tasks Stemming 

from the Dodd-Frank Act, as of October 2011 57

Figures

Figure 1: ASC’s Annual Grant Reimbursements to the Appraisal 

Foundation, Fiscal Years 2000-2010 20

Figure 2: State Disciplinary Actions Against Appraisers, Calendar 

Years 2001-2010 25

Figure 3: ASC Revenues and Expenses, Fiscal Years 2000-2010 32

Figure 4: Percentage of First-Lien Mortgages for Single-Family 

Homes Above and Below $250,000, 2006-2009 Originations 35

Figure 5: Percentage of First-Lien Mortgages for Single-Family 

Homes at or Below $250,000 by State, 2006-2009 

Originations Combined 36
Page iii GAO-12-147 Appraisal Subcommittee 

Abbreviations 

AMC appraisal management company

Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer 

 Protection Act

ASC Appraisal Subcommittee 

AVM Automated Valuation Models

BPO Broker Price Opinion

CFPB Bureau of Consumer Finance Protection

the enterprises Fannie Mae and Freddie Mac 

FBI Federal Bureau of Investigation

FDIC Federal Deposit Insurance Corporation

Federal Reserve Board of Governors of the Federal Reserve System

FFIEC Federal Financial Institutions Examination Council

FHA Federal Housing Administration

FHFA Federal Housing Finance Agency

FIRREA Title XI of Financial Institutions Reform, Recovery, 

and Enforcement Act of 1989

GPRA Government Performance and Results Act of 1993

GPRAMA GPRA Modernization Act of 2010

HMDA Home Mortgage Disclosure Act

HUD Department of Housing and Urban Development

HVCC Home Valuation Code of Conduct

NCUA National Credit Union Administration

OCC Office of the Comptroller of the Currency

OTS Office of Thrift Supervision

UMDP Uniform Mortgage Data Program

USPAP Uniform Standards of Professional Appraisal 

 Practice 

View GAO-12-198SP Key Component

Real Estate Appraisals: Survey of State Appraiser Regulatory Agencies

(GAO-12-198SP), an e-supplement to GAO-12-147

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-12-147 Appraisal Subcommittee

United States Government Accountability Office

Washington, DC 20548

January 18, 2012

The Honorable Tim Johnson

Chairman

The Honorable Richard C. Shelby

Ranking Member

Committee on Banking, Housing,

 and Urban Affairs

United States Senate

The Honorable Spencer Bachus

Chairman

The Honorable Barney Frank

Ranking Member

Committee on Financial Services

House of Representatives

In recent decades, periods of financial turmoil have focused the federal 

government’s attention on oversight of the real estate appraisal industry. 

Appraisals play a critical role in mortgage underwriting by providing 

evidence that the market value of a property is sufficient to help mitigate 

losses if the borrower is unable to repay the loan. Concerned that faulty 

and fraudulent appraisals contributed to the federal government’s losses 

during the savings and loan crisis of the 1980s, Congress enacted Title XI 

of the Financial Institutions Reform, Recovery, and Enforcement Act of 

1989 (FIRREA).1 Title XI made reforms to address both the quality of 

appraisals and the qualifications of appraisers who perform them in order 

to protect federal deposit insurance funds and promote safe and sound 

lending. Title XI also authorized federal regulators to establish dollar 

thresholds at or below which an appraisal is not required for a “federally 

related transaction.”2

 

1

Pub. L. No. 101-73, 103 Stat. 183 (1989).

Additionally, to help ensure that the purpose of the 

legislation was carried out, Title XI created a regulatory structure to 

monitor and oversee the real estate appraisal industry, including a federal 

2

Federally related transactions are real estate transactions that require the services of an 

appraiser and involve financial institutions regulated by the federal government. These 

include banks, thrifts, and credit unions. Real estate transactions of mortgage bankers, 

brokers, pension funds, and insurance companies are not included.

 
Page 2 GAO-12-147 Appraisal Subcommittee

entity called the Appraisal Subcommittee (ASC) of the Federal Financial 

Institutions Examination Council (FFIEC) to monitor the title’s 

implementation.3 As we reported in July 2011, the recent mortgage crisis 

renewed questions about real estate appraisals, including conflicts of 

interest in the appraisal process and perceptions that appraisal quality 

had diminished.4 The Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act), enacted by Congress in July 2010, 

amended Title XI and contains provisions designed to address these 

issues and gives ASC additional responsibilities and authorities.5

ASC is a small agency tasked with several key functions. ASC has 7 

board member positions and 10 staff. Five of the board members are 

designated by the federal agencies that are part of FFIEC—the Board of 

Governors of the Federal Reserve System (Federal Reserve), the Bureau 

of Consumer Financial Protection (known as the Consumer Financial 

Protection Bureau or CFPB), the Federal Deposit Insurance Corporation 

(FDIC), the National Credit Union Administration (NCUA), and the Office 

of the Comptroller of the Currency (OCC).6

 

3

FFIEC is a formal interagency body empowered to prescribe uniform principles, 

standards, and report forms for the federal examination of financial institutions by the 

Board of Governors of the Federal Reserve System, the Federal Deposit Insurance 

Corporation, the National Credit Union Administration, the Office of the Comptroller of the 

Currency, and the Bureau of Consumer Financial Protection, and to make 

recommendations to promote uniformity in the supervision of financial institutions.

CFPB has yet to designate its 

board member. The other two members of the ASC board are designated 

by the U.S. Department of Housing and Urban Development (HUD) and 

the Federal Housing Finance Agency (FHFA). ASC’s staff is headed by 

an Executive Director hired by the board. Among other things, Title XI 

requires ASC to monitor appraiser requirements established by the 

states, monitor requirements established by the federal financial 

institutions regulators with respect to appraisal standards, monitor and 

review the activities of the Appraisal Foundation (a private not-for-profit 

corporation that sets criteria for appraisals and appraisers), and maintain 

4

GAO, Residential Appraisals: Opportunities to Enhance Oversight of an Evolving 

Industry, GAO-11-653 (Washington, D.C.: July 13, 2011). 

5

Pub. L. No. 111-203, 124 Stat. 1376.

6

The remaining member of FFIEC is the State Liaison Committee, which includes

representatives from the Conference of State Bank Supervisors, the American Council of 

State Savings Supervisors, and the National Association of State Credit Union 

Supervisors.
Page 3 GAO-12-147 Appraisal Subcommittee

a national registry of state-licensed and state-certified appraisers who 

may perform appraisals in connection with federally related transactions. 

ASC is a self-supporting agency that funds its activities and operations 

through a fee assessed against appraisers that states collect and forward 

to ASC.7

The Dodd-Frank Act directed us to study ASC’s ability to carry out its 

functions and examine regulatory exemptions to appraisal requirements.8

To address these objectives, we reviewed Title XI of FIRREA and 

relevant Dodd-Frank Act provisions. We reviewed ASC policies and 

procedures, including its rules of operation, policy and procedures 

manual, Title XI policy statements, and compliance review manual. We 

also reviewed ASC records such as its annual reports to Congress, board 

meeting minutes, state compliance review reports, and documents 

concerning grants to the Appraisal Foundation. In addition, we analyzed 

data from ASC’s national registry of appraisers and FFIEC’s Home 

Mortgage Disclosure Act (HMDA) database.

Accordingly, this report discusses (1) how ASC is performing its Title XI 

functions that existed prior to the passage of the Dodd-Frank Act, (2) 

ASC’s plans and actions to implement Dodd-Frank Act provisions, and (3) 

analysis and stakeholder views on existing dollar-based exemptions to 

appraisal requirements for federally related transactions. The act also 

directed us to provide data on state enforcement actions against 

appraisers and examine the extent to which a national appraisal 

repository would benefit ASC. Appendix II contains detailed information 

on state enforcement actions against appraisers from 2001 through 2010. 

Appendix III contains discussion of the potential benefits and challenges 

of a national appraisal repository.

9

 

7

ASC does not compensate its board members for their service. 

We tested the reliability of 

the data by conducting reasonableness checks on data elements to 

identify any missing, erroneous, or outlying data. We also reviewed 

documentation on the process that the data providers use to collect and 

ensure the reliability and integrity of the data. We concluded that the data 

we used were sufficiently reliable for our purposes. Using a Web-based 

8

Dodd-Frank Act § 1476. 

9

HMDA data are reported to FFIEC by lenders and are estimated to capture 75 to 85 

percent of conventional mortgages (those without government insurance or guarantees) 

and 90 to 95 percent of mortgages insured by HUD’s Federal Housing Administration. 
Page 4 GAO-12-147 Appraisal Subcommittee

questionnaire, we surveyed appraiser regulatory agencies in the 50 

states, the District of Columbia, and 4 U.S. territories about their 

experience in implementing Title XI and their views on ASC and 

provisions in the Dodd-Frank Act.10

GAO-12-198SP

We received completed surveys from 

50 of the 55 agencies. A copy of the questionnaire, including summary 

responses to each question, can be found in an e-supplement to this 

report, . Finally, we interviewed ASC board members and 

staff; officials from CFPB, Federal Bureau of Investigation (FBI), FDIC, 

Federal Reserve, FHFA, HUD, NCUA, OCC, and Office of Thrift 

Supervision (OTS);11

We conducted this performance audit from November 2010 to January 

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

representatives of the Appraisal Foundation; state 

appraisal regulatory officials; and a range of appraisal industry 

participants, including trade groups that represent appraisers and lenders 

and officials from Fannie Mae and Freddie Mac, two governmentsponsored enterprises (the enterprises) that establish standards for 

appraisals used in connection with mortgages that they purchase. 

Appendix I contains a more detailed description of our objectives, scope, 

and methodology.

Before originating a residential mortgage loan, a lender assesses the risk 

of making the loan through a process called underwriting, in which the 

lender generally examines the borrower’s credit history and capacity to 

pay back the mortgage and obtains a valuation of the property to be used 

 

10The territories included in our survey are Guam, Northern Mariana Islands, Puerto Rico, 

and the Virgin Islands. The only other U.S. territory—American Samoa—does not have a 

regulatory oversight structure for appraisers because real estate there can only be 

inherited. In the body of this report, we use the term “states” to refer to the 50 states, the 

District of Columbia, and the territories we surveyed.

11The Dodd-Frank Act abolished OTS in 2011. In July 2011, OCC assumed oversight 

responsibility of federal savings associations from OTS, FDIC assumed OTS’s oversight 

responsibility for state savings associations, and the Federal Reserve assumed OTS’s 

oversight responsibility for savings and loan holding companies.

Background 
Page 5 GAO-12-147 Appraisal Subcommittee

as collateral for the loan. Lenders need to know the property’s market 

value, which refers to the probable price that a property should bring in a 

competitive and open market, in order to provide information for 

assessing their potential loss exposure if the borrower defaults.12 Lenders 

also need to know the value in order to calculate the loan-to-value ratio, 

which represents the proportion of the property’s value being financed by 

the mortgage and is an indicator of its risk level. Real estate can be 

valued using a number of methods, including appraisals, broker price 

opinions (BPO), and automated valuation models (AVM). Appraisals—the 

valuation method used in the large majority of mortgage transactions—

are opinions of value based on market research and analysis as of a 

specific date. Appraisals are performed by state-licensed or -certified 

appraisers who are required to follow the Uniform Standards of 

Professional Appraisal Practice (USPAP).13 A BPO is an estimate of the 

probable selling price of a particular property prepared by a real estate 

broker, agent, or sales person rather than by an appraiser. An AVM is a 

computerized model that estimates property values using public record 

data, such as tax records and information kept by county recorders, 

multiple listing services, and other real estate records.14

In 1986, the House Committee on Government Operations issued a 

report concluding that problematic appraisals were an important 

contributor to the losses that the federal government suffered during the 

savings and loan crisis.15

 

12The enterprises and federal financial institutions regulators define market value as the 

most probable price that a property should bring in a competitive and open market under 

all conditions requisite to a fair sale, the buyer and seller each acting prudently and 

knowledgeably, and assuming the price is not affected by undue stimulus.

The report states that hundreds of savings and 

loans chartered or insured by the federal government were severely 

weakened or declared insolvent because faulty and fraudulent real estate 

appraisals provided documentation for loans larger than justified by the 

collateral’s real value. In response, Congress incorporated provisions in 

Title XI of FIRREA that were intended to ensure that appraisals 

13USPAP covers both the principles appraisers must apply in developing appraisals and 

the information the appraisal report must contain.

14A multiple listing service is a database set up by a group of real estate brokers to provide 

information about properties sold and for sale.

15House Committee on Government Operations, Impact of Appraisal Problems on Real 

Estate Lending, Mortgage Insurance, and Investment in the Secondary Market, 99th 

Cong., 2nd sess., 1986, H. Rep. 99-891, 4-6.
Page 6 GAO-12-147 Appraisal Subcommittee

performed for federally related transactions were done (1) in writing, in 

accordance with uniform professional standards, and (2) by individuals 

whose competency has been demonstrated and whose professional 

conduct is subject to effective supervision.16

Various private, state, and federal entities have roles in the Title XI 

regulatory structure:

• The Appraisal Foundation. The Appraisal Foundation is a private notfor-profit corporation composed of groups from the real estate industry 

that works to foster professionalism in appraising. The foundation 

sponsors two independent boards with responsibilities under Title XI. 

The first of these, the Appraisal Standards Board, sets forth rules for 

developing an appraisal and reporting its results through USPAP. Title 

XI requires real estate appraisals performed in conjunction with 

federally related transactions to follow USPAP. The second board, the 

Appraiser Qualifications Board, establishes the minimum qualification 

criteria for state certification and licensing of real property 

appraisers.17 Title XI requires all state-licensed and -certified 

appraisers to meet the minimum education, experience, and 

examination requirements promulgated by the Appraiser 

Qualifications Board.18

• State-level regulatory entities. Title XI relies on the states to (1) 

implement the certification and licensing of all real estate appraisers 

and (2) monitor and supervise appraisers’ compliance with appraisal 

The foundation disseminates information 

regarding USPAP and the appraiser qualification criteria, which are 

periodically revised and updated, to state and federal regulators, 

appraisers, users of appraisal services, and the general public. The 

foundation is funded primarily by sales of publications but also 

receives an annual grant from ASC.

 

1612 U.S.C. §§ 3331, 3339-3345.

17Certified appraisers are one of two broad categories of appraisers listed in Title XI, the 

other being licensed appraisers. Certified appraisers are qualified to appraise properties of 

greater complexity and value than licensed appraisers and must meet higher education 

and experience requirements.

18The Appraisal Foundation also sponsors a third independent board, the Appraisal 

Practices Board, which was established in 2010 to identify and issue opinions on 

recognized valuation methods and techniques. The Appraisal Practices Board does not 

have responsibilities under Title XI.
Page 7 GAO-12-147 Appraisal Subcommittee

standards and requirements. To assure the availability of certified and 

licensed appraisers, all 50 states, the District of Columbia, and four 

U.S. territories have adopted structures to regulate and supervise the 

appraisal industry.19

• Federal financial institutions regulators. Title XI places responsibility 

for regulating appraisals and “evaluations” performed in conjunction 

with federally related transactions with the Federal Reserve, FDIC, 

OCC, and NCUA.

These structures typically consist of a state 

regulatory agency coupled with a board or commission to establish 

education and experience requirements (consistent with or in excess 

of Appraiser Qualifications Board criteria), license and certify 

appraisers, and monitor and enforce appraiser compliance. These 

regulatory agencies generally oversee the activities of appraisers for 

all types of transactions, including those that are federally related.

20 To meet this responsibility, these financial 

institution regulators have established requirements for appraisals and 

evaluations through regulations and have jointly issued Interagency 

Appraisal and Evaluation Guidelines.21

 

19The four territories are Guam, Northern Mariana Islands, Puerto Rico, and the Virgin 

Islands.

Among other things, 

appraisals for federally related transactions must, at a minimum, 

provide an estimate of market value, conform to USPAP, be in writing, 

and contain sufficient information and analysis to support the 

institution’s decision to engage in the transaction. By regulation, loans 

that qualify for sale to a U.S. government agency or U.S. government20Evaluations are estimates of market value that do not have to be performed by a statelicensed or -certified appraiser. The Federal Reserve oversees insured state-chartered 

member banks and nonbank subsidiaries of bank holding companies and savings and 

loan holding companies. FDIC oversees insured state-chartered banks that are not 

members of the Federal Reserve System, as well as state savings associations. NCUA 

oversees federal credit unions. OCC oversees federally chartered banks and federal 

savings institutions. Both the Federal Reserve and FDIC share oversight with the state 

regulatory authority that chartered the bank. The Federal Reserve also has general 

authority over lenders that may be owned by federally regulated holding companies but 

are not federally insured depository institutions.

21The federal financial institutions regulators permit evaluations to be performed 

(consistent with safe and sound lending practices) in certain circumstances, such as 

mortgage transactions of $250,000 or less that are conducted by regulated institutions. 

According to the regulators’ guidance, an evaluation should provide an estimate of the 

property’s market value; identify the location of the property and provide a description of it 

and its current and projected use; describe the methods used to confirm its physical 

condition and the extent to which an inspection was performed; indicate all sources of 

information used in the analysis; and include information on the preparer of the evaluation.
Page 8 GAO-12-147 Appraisal Subcommittee

sponsored agency and loans that are wholly or partially insured or 

guaranteed by such agencies are exempt from the appraisal 

requirements.22 In addition, loans that involve residential real estate 

transactions in which the appraisal conforms to Fannie Mae or 

Freddie Mac appraisal standards are exempt from these appraisal 

requirements. Under authority granted by Title XI, the federal 

regulators also have adopted regulations that exempt federally related 

transactions of $250,000 or less from appraisal requirements, 

meaning that the services of a licensed or certified appraiser are not 

required (although an evaluation must be performed).23 The 

regulations provide a similar appraisal exemption for real estatesecured business loans of $1 million or less that are not dependent on 

the sale of, or rental income derived from, real estate as the primary 

source of repayment.24

• Appraisal Subcommittee. ASC has responsibility for monitoring the 

implementation of Title XI by the private, state, and federal entities 

discussed previously. Among other things, ASC is responsible for (1) 

monitoring and reviewing the practices, procedures, activities, and 

organizational structure of the Appraisal Foundation—including 

making grants to the Foundation in amounts that it deems appropriate 

to help defray costs associated with its Title XI activities; (2) 

monitoring the requirements established by the states and their 

appraiser regulatory agencies for the certification and licensing of 

appraisers; (3) monitoring the requirements established by the federal 

financial institutions regulators regarding appraisal standards for 

federally related transactions and determinations of which federally 

The regulations and guidelines also specify 

the types of policies and procedures lenders should have in place to 

help ensure independence and credibility in the valuation process. 

Additionally, the federal regulators have developed procedures for 

examining the real estate lending activities of regulated institutions 

that include steps for assessing the completeness, adequacy, and 

appropriateness of these institutions’ appraisal and evaluation policies 

and procedures.

 

22These loans are subject to the appraisal requirements of the enterprises or the federal 

agency that provides the insurance or guarantee. 

23OCC: 12 C.F.R. § 34.43(a)(1); Federal Reserve: 12 C.F.R. § 225.63(a)(1); FDIC: 12 

C.F.R. § 323.3(a)(1); NCUA: 12 C.F.R. § 722.3(a)(1).

24Loans that meet the exemption must have an evaluation. NCUA regulations do not 

contain an exemption from the appraisal requirements specific to business loans.
Page 9 GAO-12-147 Appraisal Subcommittee

related transactions will require the services of state-licensed or -

certified appraisers; and (4) maintaining a national registry of statelicensed and -certified appraisers who may perform appraisals in 

connection with federally related transactions.25

Some 20 years after the passage of Title XI, questions remain about 

oversight of the appraisal industry and the quality of appraisals. Although 

the federal financial institutions regulators have had guidance since the 

1990s to help ensure the independence of appraisers, during the mid2000s, some appraisers reported that loan officers and mortgage brokers 

pressured them to overvalue properties to help secure mortgage 

approvals. An investigation into allegations about a major lender’s role in 

pressuring appraisers led to questions about what the enterprises, which 

had purchased many of the lender’s mortgages, had done to ensure that 

the appraisals for the mortgages met the enterprises’ requirements. A key 

outcome of that investigation was the enterprises’ adoption of the Home 

Valuation Code of Conduct (HVCC), which set forth appraiser 

independence requirements for mortgages sold to the enterprises. 

Although the Dodd-Frank Act declared HVCC no longer in effect, it 

codified several of HVCC’s provisions, and the enterprises have 

incorporated many of the other provisions into their requirements. As we 

reported in July 2011, appraiser independence requirements and other 

factors have increased the use of Appraisal Management Companies 

(AMC).

Among other 

responsibilities and authorities, the Dodd-Frank Act requires ASC to 

implement a national appraiser complaint hotline and provides ASC 

with limited rulemaking authority. ASC provides an annual report to 

Congress on its activities and financial status in the preceding year. 

For fiscal year 2010, ASC reported total expenses (including grants to 

the Appraisal Foundation) of approximately $3.6 million.

26

 

2512 U.S.C. § 3332.

Some appraisal industry participants are concerned that some 

AMCs may prioritize low costs and quick completion of assignments over 

appraiser competence, with negative consequences for appraisal quality. 

Moreover, according to the FBI, appraisal fraud—the deliberate 

overstatement or understatement of a home’s appraised value—is an 

ongoing concern. Of the 817 mortgage fraud cases the FBI closed from 

26GAO-11-653. AMCs are third parties that, among other things, select appraisers for 

appraisal assignments on behalf of lenders and help ensure separation between 

individuals with an interest in the outcome or dollar amount of a mortgage transaction and 

the appraiser.
Page 10 GAO-12-147 Appraisal Subcommittee

the fourth quarter of fiscal year 2010 through the third quarter of fiscal 

year 2011, 92 involved appraisal fraud.27

ASC has been performing its monitoring role under Title XI, but several 

weaknesses have potentially limited its effectiveness. In particular, ASC 

has not fully developed appropriate policies and procedures for 

monitoring state appraiser regulatory agencies, the federal financial 

institutions regulators, and the Appraisal Foundation. As part of its 

monitoring role, ASC also maintains a national registry of appraisers, 

which includes data on state disciplinary actions.

ASC has improved its reviews of state compliance with Title XI, but its 

enforcement tools and procedures for reporting compliance levels have 

been limited. ASC has detailed policies and procedures for monitoring 

state appraiser regulatory programs and has issued 10 policy statements 

covering different aspects of states’ implementation of Title XI 

requirements. The policy statements cover topics including submission of 

data to the national registry, license reciprocity (enabling an appraiser 

certified or licensed in one state to perform appraisals in other states), 

and programs for enforcing appraiser qualifications and standards. For 

example, Statement 6 states that license reciprocity agreements should 

contain certain characteristics, such as recognizing and accepting 

successfully completed continuing education courses taken in the 

appraiser’s home state. Statement 10 sets forth guidelines for enforcing 

Appraiser Qualifications Board criteria for appraiser certification and 

complaint resolution. The policy statements are designed to assist states 

in continuing to develop and maintain appropriate organizational and 

regulatory structures for certifying, licensing, and supervising real estate 

appraisers. These statements reflect the general framework that ASC 

uses to review a state’s program for compliance with Title XI. ASC staff 

told us that they had initiated actions to update the policy statements to 

reflect Appraisal Standards Board changes to USPAP, modifications to 

 

27The FBI defines mortgage fraud as a material misstatement, misrepresentation, or 

omission relied upon by an underwriter or lender to fund, purchase, or insure a loan. Prior 

to the fourth quarter of fiscal year 2010, the FBI’s information system did not have a 

specific code for appraisal fraud.

Several Weaknesses 

Have Potentially 

Limited ASC’s 

Effectiveness in 

Performing Its Title XI 

Functions 

ASC Has Improved State 

Compliance Reviews, but 

Its Enforcement Tools and 

Reporting Procedures 

Have Been Limited
Page 11 GAO-12-147 Appraisal Subcommittee

Appraiser Qualifications Board criteria, emerging issues identified through 

state compliance reviews, and provisions in the Dodd-Frank Act.

Apart from the policy statements, however, ASC has functioned without 

regulations and enforcement tools that could be useful in promoting state 

compliance with Title XI. Prior to the Dodd-Frank Act, Title XI did not give 

ASC rulemaking authority and provided it with only one enforcement 

option. ASC’s policy statements on specific elements of Title XI take the 

form of policies rather than regulations, which may limit ASC’s leverage 

over states that are not in compliance. As discussed later in this report, 

the Dodd-Frank Act provides ASC with limited rulemaking authority. Prior 

to the Dodd-Frank Act, the only enforcement action ASC could take under 

Title XI was to “derecognize” a state’s appraiser regulatory program, 

which would prohibit all licensed or certified appraisers from that state 

from performing appraisals in conjunction with federally related 

transactions. ASC has never derecognized a state, and ASC officials told 

us that using this sanction would have a devastating effect on the real 

estate markets and financial institutions within the state.

While ASC has until recently had limited enforcement tools, it has had a 

number of tools to encourage state programs to comply with the policy 

statements and therefore Title XI requirements (see table 1). ASC’s 

primary tools for monitoring the states are routine and follow-up 

compliance reviews, which are performed on site by ASC’s four Policy 

Managers. These reviews are designed to encourage adherence to Title 

XI requirements by identifying any instances of noncompliance or “areas 

of concern” and recommending corrective actions.28

 

28ASC defines an area of concern as one in which the state is in compliance but could 

improve.

ASC conveys its 

findings and recommendations to states through written reports. 

Examples of areas covered by the reviews include timeliness in resolving 

complaints about appraiser misconduct or wrongdoing; degree to which 

education courses are consistent with Appraiser Qualifications Board 

criteria; adequacy of state statutes and regulations on certifying and 

licensing appraisers; timeliness and completeness of data submissions to 

the national registry and remittance of national registry fees; and 

validation of documentation supporting appraiser education and 
Page 12 GAO-12-147 Appraisal Subcommittee

experience.29

Table 1: ASC’s Tools for Monitoring State Compliance with Title XI Requirements

ASC supplements the compliance reviews with “priority 

contact visits” on an as-needed basis and off-site monitoring performed 

continuously.

Monitoring tool Description Frequency

Routine compliance 

reviews

Full on-site reviews of state appraiser regulatory programs. Every 2 years or annually if ASC 

determines that a state needs closer 

monitoring.

Follow-up compliance 

reviews

On-site reviews focused on areas of noncompliance 

identified during routine compliance reviews.

6 to12 months after previous compliance 

review.

Priority contact visits On-site visits, usually to states with large populations of 

appraisers, to discuss potentially problematic emerging 

issues and maintain a close working relationship with the 

state agency. 

As-needed.

Off-site monitoring Telephone or e-mail contacts with state agencies regarding 

emerging compliance issues and progress in addressing 

previously identified issues.

Continuous.

Source: ASC.

ASC has enhanced its compliance review process over the years and 

uses a risk-based monitoring approach. For example, in 2006, ASC 

increased the frequency of its routine compliance reviews from once 

every 3 years to once every 2 years. In recent years, this schedule has 

resulted in 26 to 32 reviews annually. According to ASC staff, concerns 

with several states’ appraiser regulatory programs prompted the change, 

which has enabled ASC to identify and address compliance problems in a 

more timely way. In January 2009, ASC modified its review process by 

allowing states to respond to preliminary findings before a compliance 

review report is issued to a state and publicly released on ASC’s website. 

ASC considers the state’s response, which can include comments and 

corrective actions, in finalizing the report. That same year, ASC revised 

the format of the reports to convey findings in a more concise and 

structured way. According to one ASC board member, the new format 

has improved the consistency of ASC’s reporting. Consistent with ASC’s 

monitoring policies, our review of ASC’s records from 2007 through 2010 

indicated that ASC reviewed states it had designated as higher risk more 

 

29Specific requirements related to some of these areas are that states should investigate 

and resolve complaints within 1 year of the complaint filing date, must adopt all relevant 

Appraiser Qualifications Board criteria, and must transmit appraiser data at least monthly 

to the national registry.
Page 13 GAO-12-147 Appraisal Subcommittee

frequently than other states. As previously noted, ASC reviews most 

states on a 2-year cycle; however, it may move a state to a 1-year cycle if 

prior reviews or contacts have found serious Title XI noncompliance or 

raised concerns about the risk of future noncompliance.30

As shown in table 2, results of state compliance reviews from calendar 

years 2007 through 2010 identified areas in which noncompliance 

findings were numerous and others in which noncompliance was less 

common. Over that period, ASC reported 69 findings of state 

noncompliance with enforcement requirements such as those related to 

complaint processing; 59 findings of noncompliance with requirements for 

appraiser application processing; and 30 findings of noncompliance with 

requirements for statutes, regulations, policies, and procedures. The 

number of noncompliance findings concerning enforcement was fairly 

consistent during the 4-year period. Most of these findings were due to 

some states’ failure to investigate and resolve complaints about 

appraisers in a timely manner, an area of long-standing concern in 

several states. For example, a 2010 compliance review report noted that 

ASC had cited a state for untimely investigation and resolution of 

complaints in every review since 2000. Noncompliance findings in the 

application process category encompassed a range of shortcomings in 

ensuring that approved applicants met Appraiser Qualifications Board 

criteria. For example, in a 2008 report, ASC cited a state for issuing 

certified appraiser credentials to individuals who lacked proper 

experience and noted that three previous reviews had made the same 

finding. State appraiser regulatory agencies—which are funded at the 

state level—have reported resource limitations as a key impediment in 

carrying out their Title XI responsibilities. Specifically, 15 of the 47 state 

agencies that responded to our survey indicated that their funding was 

During the 4-

year period we examined, ASC conducted 1-year reviews of 12 states 

due to the seriousness of their compliance problems or state resource 

challenges that increased the risk of noncompliance. For example, a 2007 

review of one state cited four instances of noncompliance and 

emphasized long-standing deficiencies in the state’s process for 

investigating and resolving complaints as the primary reason for the 1-

year review cycle. ASC staff also conducted a priority contact visit to this 

state within 10 months of the 2008 compliance review.

 

30A 1-year review cycle can take a number of forms, including annual routine compliance 

reviews and routine compliance reviews every 2 years with follow-up reviews in between.
Page 14 GAO-12-147 Appraisal Subcommittee

inadequate to carry out their statutory responsibilities.31 From 2007 

through 2010, noncompliance was less common in the remaining four 

areas—temporary practice, national registry, reciprocity, and education.32

Table 2: Number and Type of Noncompliance Findings Identified in ASC’s State Compliance Reviews, 2007-2010

For example, over the 4-year period, ASC reported no noncompliance 

findings concerning reciprocity and eight concerning education.

Type of noncompliance

Year

Statutes, 

regulations, 

policies and 

procedures

Temporary 

practice

National 

registry 

Application 

process Reciprocity Education Enforcement Total

2007 4 11 7 23 0 8 19 72

2008 15 8 4 8 0 0 16 51

2009 7 0 1 19 0 0 15 42

2010 4 1 1 9 0 0 19 34

Total 30 20 13 59 0 8 69 199

Source: GAO analysis of ASC annual reports.

Note: Prior to 2008, ASC used a broad “compliance” category to report certain types of 

noncompliance findings. Using the more specific reporting categories ASC adopted in 2008, we 

reclassified 35 findings reported in 2007 under the “compliance” category as statutes, regulations, 

policies and procedures noncompliance (4 findings); application process noncompliance (23 findings);

and education noncompliance (8 findings).

At the completion of each review, ASC executive staff and board 

members deliberate on the findings and place the state into one of three 

broad compliance categories: “in substantial compliance,” “not in 

substantial compliance,” and “not in compliance”. According to ASC, “in 

substantial compliance” applies when there are “no issues of 

noncompliance or no violations of Title XI”; “not in substantial compliance” 

applies when there are “one or more issues of noncompliance or 

violations of Title XI but the concerns do not rise to the level of ‘not in 

compliance’”; and “not in compliance” applies when “the number, 

seriousness, and/or repetitiveness of the Title XI violations warrant this 

 

31Three of the respondents to our survey did not provide a response to this question. 

32Temporary practice refers to a state’s recognition of the certification or license of an 

appraiser from another state provided: (1) the property to be appraised is part of a 

federally related transaction, (2) the appraiser’s business is of a temporary nature, and (3) 

the appraiser registers with the state appraiser regulatory agency in the state of temporary 

practice.
Page 15 GAO-12-147 Appraisal Subcommittee

finding.”33 From 2007 through 2010, 52 states were reviewed at least 

twice, so any changes in their compliance levels during this period can be 

observed. Over the 4-year period, 28 remained in the same category, 19 

states moved to a more favorable compliance category, and 5 moved to a 

less favorable category.34 Most of the states that moved to a more 

favorable category (17 of 19) went from “not in substantial compliance” to 

“in substantial compliance.”35 Of the states remaining in the same 

category, most (22 of 28) were in the “not in substantial compliance” 

category.36

Although ASC has been using the three compliance categories in its 

reports to states and annual reports to Congress (which provide 

aggregate statistics on the number of states in each category), it has not 

included the definitions of the categories in these reports or in its 

compliance review manual or policy and procedures manual.

All of the states that moved to a less favorable category went 

from “in substantial compliance” to “not in substantial compliance.” 

37

 

33Because a state only has to have one noncompliance finding to be “not in substantial 

compliance,” this category can encompass a fairly wide range of performance. For 

example, in 2009, states in this category had from one to seven findings of 

noncompliance. 

In 

addition, ASC’s definition for “not in compliance” is not clear or specific. 

As discussed earlier, it states only that the category is to be used “when 

the number, seriousness, and/or repetitiveness of the violations warrant 

this finding” and does not elaborate on how these factors are weighed or 

provide examples of situations that would meet this definition. These 

shortcomings are inconsistent with our internal control standards, which 

34We could not assess changes in compliance categories for three states because only 

one routine compliance review was conducted of each state during the period we 

reviewed.

35The remaining two states moved from “not in compliance” to “not in substantial 

compliance.”

36Of the other six states, five were “in substantial compliance,” and one was “not in 

compliance.” 

37Although ASC developed definitions of the categories in 2005, it did not explicitly use the 

categories in its reports to states until 2009. For example, instead of saying that a state 

program was not in substantial compliance, a report would say that the state needed to 

address particular issues to bring the program into substantial compliance. In 2009, in 

conjunction with other revisions to its state compliance reports, ASC began explicitly using 

the compliance categories. That year, ASC also began reporting the number of states in 

each category in its annual reports to Congress.
Page 16 GAO-12-147 Appraisal Subcommittee

state that federal agencies should have appropriate policies and 

procedures for each of their activities.38 Without clear, disclosed 

definitions, ASC limits the transparency of the state compliance review 

process and the usefulness of information Congress receives to assess 

states’ implementation of Title XI. Further, by not incorporating the 

definitions into its compliance review and policy and procedures manuals, 

ASC increases the risk that board members and staff may not interpret 

and apply the compliance categories in a consistent manner.

Although Title XI charges ASC with monitoring the appraisal requirements 

of the federal financial institutions regulators, ASC has not developed 

policies and procedures for carrying out this responsibility. As previously 

noted, our internal control standards state that federal agencies should 

have appropriate policies and procedures for each of their activities.39

According to ASC officials, ASC performs this monitoring function through 

informal means, primarily through its board members who are employed 

by the federal financial institutions regulators. They said that several ASC 

board members represent their agencies on an interagency appraisal 

workgroup (not under the auspices of ASC) and provide information on 

agency appraisal policies to ASC staff and the other board members.

While ASC’s policy manual provides detailed guidance on monitoring 

state appraiser regulatory programs, it does not mention any activities 

associated with monitoring the appraisal requirements of the federal 

financial institutions regulators. Further, ASC officials acknowledged the 

absence of a formal monitoring process. The absence of policies and 

procedures specifying monitoring tasks and responsibilities limits 

accountability for this function and is inconsistent with federal internal 

control standards designed to help ensure effectiveness and efficiency in 

agency operations.

40

 

38GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999) and GAO, Internal Control Management and 

Evaluation Tool, GAO-01-1008G (Washington, D.C.: August 2001).

39GAO/AIMD-00-21.3.1 and GAO-01-1008G. 

40However, the officials also indicated that the amount of information that could be shared 

was limited when agency policies or proposals were under deliberation or in a public 

comment period. The interagency workgroup includes officials from the Federal Reserve, 

FDIC, OCC, NCUA, FHFA, and CFPB. The workgroup develops uniform appraisal 

guidance that is issued by all of these agencies.

ASC Has Not Developed 

Policies and Procedures 

for Monitoring the 

Appraisal Requirements of 

the Federal Financial 

Institutions Regulators 
Page 17 GAO-12-147 Appraisal Subcommittee

ASC officials also told us that the federal regulators sometimes seek 

technical assistance from ASC staff on appraisal practices and standards. 

Minutes from ASC’s monthly board meetings and ASC’s annual reports to 

Congress indicate that the monitoring activities of ASC as a whole have 

been limited. For example, our review of board meeting minutes from 

2003 through 2010 found no instances of the board discussing the 

appraisal requirements of the federal financial regulators.41

Stakeholder views differ as to how to interpret the Title XI requirement 

that ASC monitor the requirements established by the federal financial 

institutions regulators with respect to appraisal standards.

Additionally, 

evidence of this monitoring function in ASC’s annual reports is limited to a 

summary of any new appraisal requirements issued by the federal 

financial regulators and HUD during the preceding year.

42

In contrast, some appraisal industry stakeholders and observers have 

proposed a larger ASC role in monitoring the appraisal requirements of 

the federal financial institutions regulators. An ASC board member who

conducted a review of ASC’s operations in 2007 recommended a more 

structured and active monitoring role for ASC. The board member’s 

report—which the board never officially adopted—suggested that ASC 

staff could be assigned to keep abreast of federal financial regulators’ 

requirements and guidelines; the staff could then assess the impact of the 

Specifically, 

some ASC board members told us that they understand their monitoring 

role as maintaining an awareness of the federal financial regulators’ 

appraisal requirements. Further, one ASC board member told us that 

ASC’s monitoring of the federal financial regulators was more limited than 

its monitoring of states because (1) board members from the federal 

financial regulatory agencies are knowledgeable of the appraisal 

requirements of their agencies, (2) the federal regulators’ interagency 

process for developing appraisal guidelines (in place since 1994) has 

reduced the need for monitoring the consistency of guidelines across 

agencies, and (3) monitoring the states’ appraiser requirements requires 

in-depth review of state processes for licensing, certification, and 

enforcement.

 

41The minutes indicated that on at least two occasions, the HUD representative to the 

ASC board provided updates on appraisal policies for mortgages insured by HUD’s 

Federal Housing Administration.

4212 U.S.C. § 3332(a)(2).
Page 18 GAO-12-147 Appraisal Subcommittee

requirements on ASC’s operations and policies. Under this proposed 

recommendation, ASC staff would annually report the results of this work 

to the ASC board members. Although ASC acted on several of the 

report’s administrative proposals, ASC did not adopt the 

recommendation, and minutes from ASC’s monthly board meetings do 

not contain discussion of the issue.43 A former General Counsel of ASC 

told us that ASC’s monitoring role should include critically assessing the 

adequacy of the federal financial regulators’ appraisal requirements and 

evaluating how well the requirements are being implemented. He 

indicated that such assessment might have helped federal financial 

regulators and policymakers address issues such as appraiser 

independence, establishing dollar-based exemptions from appraisal 

requirements, and referral of Title XI violations to state agencies.44

However, appraisal industry stakeholders also noted that implementing a 

more expansive interpretation of ASC’s monitoring role would pose 

challenges. For example, existing ASC staff may not have the capacity to 

take on additional monitoring responsibilities. According to ASC officials, 

ASC’s Policy Managers already spend the large majority of their time 

working on state compliance reviews and have other duties. Therefore, 

adding to these responsibilities could require the addition of more staff or 

reduce the time existing staff spend on monitoring the states. Even if ASC 

staff were able to independently analyze the federal regulators’ appraisal 

requirements, the analysis would be subject to review by the ASC board, 

which, because of its composition, is not independent from the agencies 

A 

representative of an appraisal industry group expressed a similar view 

and noted that ASC’s annual reports did not provide substantive analysis 

or critique of federal appraisal requirements.

 

43ASC adopted some of the report’s recommendations such as creating a Deputy 

Executive Director position and allowing states to respond to preliminary compliance 

review findings prior to the issuance of final reports.

44In a 2003 report, we discussed the view of state appraiser regulatory agencies that 

lenders and federal financial institutions regulators were not actively reporting Title XI 

violations to state regulators. See GAO, Regulatory Programs: Opportunities to Enhance 

Oversight of the Real Estate Appraisal Industry, GAO-03-404 (Washington, D.C.: May 14, 

2003). The Dodd-Frank Act amended the Truth in Lending Act to require lenders (among 

others) who have a reasonable belief that an appraiser has not complied with ethical and 

professional requirements under federal or state law or USPAP to report the failure to the 

appropriate state licensing agency. The Federal Reserve has implemented this 

requirement through its Truth in Lending regulations (known as Regulation Z). See 12 

C.F.R. § 226.42(g).
Page 19 GAO-12-147 Appraisal Subcommittee

that ASC is charged with monitoring. Board members stated that they 

were appointed to ASC primarily to represent their home agency’s views 

and could not act without their agency’s approval. Although not within the 

scope of our review, alternative organizational structures for ASC (for 

example, an independent entity within a nonbanking agency) could 

potentially address this limitation, but any benefits would have to be 

weighed against the implications for ASC’s operating costs and 

performance of its other monitoring responsibilities.

As discussed earlier, the Appraisal Foundation is a private not-for-profit 

corporation that sponsors independent boards that set standards for 

appraisals and minimum qualification criteria for appraisers. ASC 

approves an annual grant proposal and provides monthly grant 

reimbursements to the Appraisal Foundation to support the Title XIrelated activities of the foundation and its Appraisal Standards Board and 

Appraiser Qualifications Board. The reimbursements cover the 

foundation’s incurred costs for activities under the grant. From fiscal years 

2000 through 2010, ASC provided the foundation over $11 million in grant 

reimbursements, or about 40 percent of ASC’s expenditures over that 

period. In nominal dollars, the total amounts reimbursed each year 

ranged from a low of about $614,000 in fiscal year 2001 to a high of about 

$1.4 million in fiscal year 2009 (see fig. 1).

ASC Monitors the 

Appraisal Foundation but 

Has No Written Policies for 

Determining Whether the 

Foundation’s Grant 

Activities Are Title 

XI-Related
Page 20 GAO-12-147 Appraisal Subcommittee

Figure 1: ASC’s Annual Grant Reimbursements to the Appraisal Foundation, Fiscal Years 2000-2010

ASC’s initial grants to the Appraisal Foundation after the enactment of 

Title XI focused on supporting the development of uniform appraisal 

standards and appraiser qualification criteria.45

 45The Appraisal Foundation existed prior to ASC. In 1986, nine leading professional 

appraisal organizations in the United States and Canada formed a committee that 

developed the original version of USPAP. The Appraisal Foundation was established in 

1987 to implement USPAP, which was approved and adopted by the foundation’s 

Appraisal Standards Board in 1989.

For example, with the 

support of ASC grant funds, the Appraisal Standards Board issued a 

revision of USPAP in 1990 and the Appraiser Qualifications Board issued 

its original education, experience, and examination criteria in 1991. In 

more recent years, the Appraisal Foundation’s grant activities have 

included developing a program to approve appraiser education courses, 

developing state investigator training courses, and updating USPAP. The 

voluntary course-approval program is designed to facilitate state approval 

of appraiser education courses submitted by course providers and acts as 

a national clearinghouse of appraisal courses, thereby streamlining the 

approval process for both course providers and states. The state 

investigator training courses were jointly developed and sponsored by the 
Page 21 GAO-12-147 Appraisal Subcommittee

Appraisal Foundation and the Association of Appraiser Regulatory 

Officials with the goal of promoting more effective investigation and 

resolution of complaints against appraisers.46

ASC monitors and reviews the Appraisal Foundation in the following four 

main ways:

As previously discussed, 

investigation of complaints has been a long-standing weakness for some 

state appraiser regulatory agencies. The training covers topics such as 

planning investigations, interview and investigative techniques, and 

reporting findings and recommendations.

• Review of annual grant proposal. Each year, ASC’s Executive 

Director reviews the foundation’s annual grant proposal, which details 

the foundation’s activities for the upcoming year. The proposal 

contains a statement of work and supporting cost schedules. The 

Executive Director determines whether the proposed activities are 

Title XI-related and reasonable. To assess reasonableness, the 

Executive Director applies ASC or General Services Administration 

criteria for consultant, travel, and indirect costs and may request 

supplemental information from the foundation.47

• Review of grant reimbursement requests. ASC reimburses the 

Appraisal Foundation for costs the foundation has incurred in 

performing grant activities. Each month, the Executive Director 

reviews the foundation’s grant reimbursement request for Title XIrelated costs incurred during the previous month. The review focuses 

on whether the requested reimbursement covers grant-related (and 

hence Title XI-related) activities and whether the costs are appropriate 

under the grant. The Executive Director prepares a memorandum 

The Executive 

Director then prepares a memorandum summarizing his analysis and 

recommendations and presents it to the ASC board for approval. The 

ASC board reviews the recommendation and asks for additional 

information from the ASC staff or the foundation, as necessary. 

Additionally, foundation staff attend an ASC board meeting to present 

and answer questions about their grant proposal.

 

46The Association of Appraiser Regulatory Officials is an industry group that represents 

state appraiser regulatory agencies.

47For example, in reviewing the Appraisal Foundation’s 2011 grant proposal, the Executive 

Director asked the Foundation for information about reasons for cost increases above the 

general rate of inflation and the rationale for increasing the scope of a project.
Page 22 GAO-12-147 Appraisal Subcommittee

summarizing his analysis and recommendations regarding payment 

and presents it to the ASC board for approval.

• Third-party review of grant records. ASC contracts with an 

independent audit firm to annually assess, among other things, 

whether the Appraisal Foundation expended grant funds on and 

charged costs to activities allowed in the grant agreement.48

• Attending foundation meetings. ASC staff, usually the Executive 

Director, attend every meeting of the foundation’s Board of Trustees, 

Appraisal Standards Board, and Appraiser Qualifications Board.

The 

reviews from 2005 through 2010 identified no questionable grant 

expenditures or allocation of costs but noted some minor internal 

control deficiencies. For example, the 2005 review found that payment 

requests for postage, printing, and telephone costs lacked an 

authorizing signature.

49

Although ASC monitors the foundation in several ways, ASC lacks 

specific policies and procedures for determining whether grant activities 

are related to Title XI. ASC’s policies and procedures manual does not 

address how ASC monitors the Appraisal Foundation. Instead, ASC uses 

monitoring procedures contained in a memorandum prepared by a former 

Executive Director. The memorandum describes how he reviewed the 

foundation’s grant activities but does not provide criteria for deciding what 

is Title XI-related. When we asked current ASC officials for the criteria 

they used, they indicated only that ASC staff “review submissions from 

the Foundation and supporting cost spreadsheets to determine that 

activities proposed in the annual grant request or the monthly 

reimbursement processes meet the requirements of Title XI.” They said 

that once staff determine whether or not a submission falls within these 

parameters, they make a recommendation to the ASC board. However, 

determinations about what activities are Title XI-related are not always 

clear-cut. For example, in 2003, the Executive Director at the time 

ASC staff observe the meetings and provide input, as appropriate.

 48The review is an “agreed-upon procedures review,” meaning that ASC determines what 

facets of the foundation’s activities and records should be reviewed. According to the 

independent audit firm, the review is not an audit and does not express an opinion on the 

foundation’s financial statements or any of its components. 

49ASC staff also attend meetings of the foundation’s Appraisal Practices Board, which 

does not have responsibilities under Title XI and is not funded by ASC.
Page 23 GAO-12-147 Appraisal Subcommittee

recommended that the foundation be reimbursed for certain legal 

expenses in connection with a complaint filed with the foundation’s ethics 

committee. However, the ASC board rejected the reimbursement request 

because the expenses “were not sufficiently Title XI-related.” ASC’s 

records do not indicate what criteria either the Executive Director or the 

ASC board used as a basis for their decisions or why they disagreed. 

Similarly, our review of ASC documents for more recent grants found no 

supporting explanations for decisions about whether grant activities were 

Title XI-related. One ASC board member said the board had a common 

understanding of what activities were eligible for grants but acknowledged 

that the basis for funding decisions could be better documented. As 

previously noted, our internal control standards state that federal 

agencies should have appropriate policies for each of their activities. 

Without policies that contain specific criteria, ASC increases the risk that 

its grant decisions will be inconsistent, limits the transparency of its 

decisions, and lacks assurance that it is complying with federal internal 

control standards.

ASC maintains a national registry database that contains selected 

information about the nation’s state-certified and -licensed real estate 

appraisers. Only state-certified or -licensed appraisers listed on the 

registry as having currently valid certifications or licenses (appraiser 

credentials) are authorized to perform appraisals in connection with 

federally related transactions. As of December 31, 2010, the national 

registry showed that there were nearly 110,000 active appraiser 

credentials.50

 

50Appraisers can hold credentials in more than one state. Therefore, at the national level, 

the total number of appraiser credentials is greater than the total number of appraisers.

In addition to eligibility information, the registry contains 

information about the number of active and inactive licenses, the types of 

licenses, and any disciplinary actions taken by states against appraisers. 

The registry contains both public and nonpublic information—for example, 

some data on disciplinary actions are restricted to authorized 

representatives of state regulatory agencies. Users of the registry—which 

include appraisers, federal and state agencies, financial institutions, and 

consumers—can access it via the Internet. ASC provides instructions to 

states for uploading data to the registry. In addition, ASC charges each 

individual who performs or seeks to perform appraisals in conjunction with 

ASC Maintains a National 

Registry That Includes 

Data on State Disciplinary 

Actions 
Page 24 GAO-12-147 Appraisal Subcommittee

federally related transactions an annual $25 national registry fee, which 

states collect and forward to ASC.

According to ASC, the registry is designed to allow users to determine (1) 

whether an appraiser is eligible to perform appraisals in conjunction with 

federally related transactions and (2) whether the appraiser has been 

subject to disciplinary actions such as suspension or revocation of 

credentials. The registry also helps facilitate “reciprocity”—that is, 

allowing appraisers to use credentials from their home state to obtain 

credentials in another state without taking examinations or meeting 

additional requirements—by allowing states to determine the status of an 

appraiser’s credentials. Forty-nine of the 50 state appraiser regulatory 

agencies that responded to our survey said they used the registry to 

verify that applicants from other states are licensed or certified in those 

states, and 47 of the 50 said they used the registry to find out if 

disciplinary actions were taken against an appraiser in other states. In 

addition, financial institutions can receive updates via the Internet on 

revocations, suspensions, surrenders, and expirations of appraiser 

credentials.

Information contained in the registry comes from the states, which must 

submit appraiser data to ASC at least monthly. In 2010, ASC redesigned 

the registry to, among other things, allow states to report data directly into 

the system rather than forwarding electronic files. Thirty-one of our state 

survey respondents indicated that they submitted data more than once 

per month. The registry has built-in edit checks to help ensure the 

reliability of the data entered into the system. Prior to officially updating 

the registry each day, ASC runs validation checks on the states’ data. If 

the validation fails, the failure is identified on an exception report reviewed 

by ASC’s Information Specialist, who contacts the state for corrected 

data, as necessary.51

From calendar years 2001 through 2010, states reported 15,938 

disciplinary actions to the registry. Over that 10-year period, the number 

of actions reported annually ranged from a low of 830 in 2003 to a high of 

Based on data submitted by the states, the registry 

also generates invoices for appraiser registration fees on a monthly basis. 

ASC then forwards the invoices to the states for payment.

 

51An exception report is a listing of abnormal items or items that fall outside of a specified 

range.
Page 25 GAO-12-147 Appraisal Subcommittee

2,471 in 2007 (see fig. 2). For the 10 years combined, Florida reported 

the most disciplinary actions (1,480), while three states reported none. 

The types of actions reported by states included probation, suspension, 

and revocation of appraiser credentials, as well as fines and additional 

education. The most common action was a fine, and the least common 

was a downgrade in the appraiser’s credentials (for example, from 

certified to licensed).

Figure 2: State Disciplinary Actions Against Appraisers, Calendar Years 2001-2010

Appendix II contains additional information, including statistics on the 

number of active appraisers by type of credential as of December 31, 

2010, and disciplinary actions reported by each state over the 10-year 

period.
Page 26 GAO-12-147 Appraisal Subcommittee

The Dodd-Frank Act contains 14 provisions that give ASC a number of 

new responsibilities and authorities. We identified 27 tasks associated 

with these provisions, ranging from complex undertakings to more 

straightforward administrative actions. Some of the more complex tasks 

include establishing and maintaining a national appraisal complaint 

hotline, making grants to state appraiser regulatory agencies, and 

implementing new rulemaking authority and enforcement tools. The act 

includes several other tasks such as encouraging states to accept 

appraisal courses approved by the Appraiser Qualifications Board and to 

establish policies for issuing reciprocal licenses or certifications to

qualified appraisers from other states. As of October 2011, ASC had 

completed several tasks that required no rulemaking or creation of new 

programs and was in various stages of progress on the others. Appendix 

IV provides a summary of all 27 tasks and their status as of October 

2011.

The Dodd-Frank Act requires ASC to determine whether a national 

hotline exists that receives complaints of noncompliance with appraisal 

independence standards and USPAP, including complaints from 

appraisers, individuals, or other entities concerning the improper 

influencing or attempted improper influencing of appraisers or the 

appraisal process. ASC completed this task in January 2011, within the 

statutory deadline, and reported that no such hotline currently existed.

The Dodd-Frank Act also requires ASC to establish and operate such a 

national hotline, including a toll-free telephone number and an e-mail 

address, if it determined that one did not already exist. Additionally, the 

act requires ASC to refer hotline complaints to appropriate governmental 

bodies for further action. ASC has not fully addressed this requirement 

but has researched how other agencies operate hotlines and make 

complaint referrals. ASC officials told us that the hotline would require 

significant staff and funds and that they were exploring options for 

implementing it, including hiring a contractor.

Dodd-Frank Act 

Provides ASC New 

Authorities and 

Presents 

Implementation 

Challenges 

The Dodd-Frank Act 

Expands ASC’s Role and 

Provides New Tools to 

Oversee State Appraiser 

Regulatory Agencies

National Hotline
Page 27 GAO-12-147 Appraisal Subcommittee

Appraisal industry stakeholders we spoke with identified a number of 

potential challenges in establishing and operating a hotline. They noted 

that creating and maintaining a hotline could be costly because it will 

likely require investments in staff and information technology to fully 

ensure that calls are properly received, screened, tracked, and referred to 

appropriate regulatory agencies. Stakeholders indicated that screening 

calls would be a critical and challenging task because frivolous 

complaints could overwhelm the system and identifying valid complaints 

would require knowledge of USPAP. Some stakeholders we spoke with 

expressed concern about consumers using the hotline simply to report 

disagreement with an appraiser’s valuation instead of to report USPAP 

violations, concerns about appraiser independence, or potential fraud. 

Some appraisers said that frivolous consumer complaints could hurt an 

appraiser’s ability to get future appraisal assignments, while federal 

financial regulatory officials said that frivolous complaints from appraisers 

against lenders could lead to costly and time-consuming investigations. 

Additionally, industry stakeholders noted that the hotline would only have 

value if valid complaints were followed up and resolved but pointed out 

that some states lack the resources to handle their existing volume of 

complaints. Further, stakeholders said that deciding which regulatory

entities should receive complaint referrals could be difficult in some cases 

and that differing state requirements for complaints (such as forms, 

procedures, and standards) could complicate the referral process.52

Nonetheless, appraisal industry stakeholders told us they believed that 

the hotline would offer several benefits. These included giving appraisers 

a central place to report when they feel they are being pressured, 

providing a conduit to forward complaints to appropriate entities, 

promoting the development of more uniform complaint and complaint 

follow-up procedures, and providing ASC with information that could be 

useful for its state and appraiser enforcement efforts. Among the state 

appraiser regulatory agencies we surveyed, views on establishing a 

hotline varied. For example, 13 of the 50 states responded that the hotline 

would improve their ability to regulate the appraisal industry in their state, 

while 9 viewed it as a hindrance. Of the remaining 28 respondents, 13 

thought it would neither help nor hinder, 12 did not know, 2 commented 

on the potential for frivolous complaints, and 1 did not respond. 

 

52For example, some states require or request complaints to be notarized, while others do 

not.
Page 28 GAO-12-147 Appraisal Subcommittee

Additionally, 25 of the 50 states responded that the establishment of a 

hotline would increase the number of complaints they received.

The Dodd-Frank Act requires ASC to make grants to state appraiser 

regulatory agencies to support these agencies’ compliance with Title XI, 

including processing and investigating complaints, enforcement activities, 

and submission of data to the national registry.53 As previously noted, 

timely investigation and resolution of complaints has been a persistent 

problem for a number of states. Most of the state appraiser regulatory 

agencies we surveyed expressed interest in applying for ASC grants once 

the program is implemented. Specifically, 34 of the 50 states responding 

to our survey indicated they would likely apply for a grant, while 8 said 

they were unlikely to do so, and 3 said they were neither likely nor 

unlikely to do so.54

While generally supportive of the grant program, appraisal industry 

stakeholders and ASC officials we spoke with noted several potential 

hurdles. Several stakeholders raised concerns about whether ASC had 

adequate resources to fund grants or sufficient expertise in grant 

administration and oversight. For example, officials from one appraisal 

industry group noted that ASC’s grant resources could be spread thin if 

numerous states apply and that states may not find small grants to be 

worthwhile. ASC officials said they were unsure whether a planned 

increase in the national registry fee—from $25 to $40 per appraiser 

credential, effective January 2012—would be adequate to fund the grants 

and oversee them, especially in light of recent declines in the number of 

appraisers.

States cited activities related to enforcement and 

complaints—such as training for prosecutors and investigation of 

complaints—as the most likely potential uses of grant funds. Other 

potential uses cited by states included technological improvements for 

submitting data to the national registry and hiring appraiser licensing staff.

55

 

53Pub. L. No. 111-203, § 1473(i) (codified at 12 U.S.C. § 3338(b)(5)). The act states that 

the grants are to be made in accordance with policies to be developed by ASC. 

They also indicated that they would likely need to hire a 

grants specialist and an accountant to properly administer the grant 

program.

54Four responded that they did not know, and one provided no response. 

55Although the Dodd-Frank Act also authorized ASC to collect registry fees from AMCs, 

revenues from this source may not be available for several years because regulations for 

AMC registration must be developed and implemented first.

Grants to State Regulatory 

Agencies 
Page 29 GAO-12-147 Appraisal Subcommittee

Additionally, appraisal industry stakeholders cited challenges that ASC 

could face in designing the grant program and the decisions it will need to 

make. Some noted the challenge of designing grant eligibility and award 

criteria that (1) do not reward states that have weak appraiser regulatory 

programs because they use appraisal-related fee revenues (from state 

appraiser licensing and exam fees, for example) for purposes other than 

appraiser oversight and (2) will not create incentives for states to use less 

of their own resources for regulation of appraisers.56 They noted that 

some states direct (or “sweep”) appraisal-related revenues into the state’s 

general fund, which, in some cases may contribute to underfunding of the 

state’s appraiser regulatory agency. Twenty-six of the 50 state agencies 

that responded to our survey reported that their state government had the 

authority to sweep revenues collected by the agency into the state’s 

general fund, and 19 of these 26 indicated that their state had exercised 

this authority.57

The Dodd-Frank Act also gives ASC the authority to prescribe regulations 

in four areas: temporary practice, the national registry, information 

sharing, and enforcement.

In addition, stakeholders had a range of views on what 

the grant award criteria should include. For example, some suggested 

flexible grants based on the number of complaints or the number of 

appraisers in a state. However, others, including an ASC board member, 

said that the grants should target specific, well-defined initiatives to help 

ensure that funds are used appropriately. The board member pointed to 

state investigator training funded through ASC grants to the Appraisal 

Foundation as an example of such an initiative. States responding to our 

survey identified other possible funding criteria, including the extent to 

which a state had established appropriate performance benchmarks and 

the state’s past efforts to address compliance deficiencies.

58

 

56Most of the states appraiser regulatory agencies that responded to our survey indicated 

that they relied on fee revenues to fund their operations. 

For purposes of prescribing regulations, the 

act requires ASC to establish an advisory committee of industry 

participants, including appraisers, lenders, consumer advocates, real 

estate agents, and government agencies, and hold meetings as 

57Of the remaining 24 respondents, 10 said their state had no such authority, 10 did not 

know, and 4 did not provide a response.

58Pub. L. No. 111-203, § 1473(d) (codified at 12 U.S.C. § 3335). ASC must prescribe 

regulations in accordance with the Administrative Procedures Act after providing notice 

and opportunity for comment.

Rulemaking Authority and 

Enforcement Tools
Page 30 GAO-12-147 Appraisal Subcommittee

necessary to support the development of regulations. Although ASC 

already has policy statements covering the four areas, appraisal industry 

stakeholders and ASC officials indicated that regulations could be 

expected to strengthen ASC’s leverage over states to comply with Title 

XI. In addition, ASC officials noted that rulemaking authority would allow 

them to establish mandatory state reporting requirements and provide 

them additional administrative options to address state noncompliance. 

However, as of October 2011, ASC had not established an advisory 

committee or drafted any regulations. ASC officials told us that these 

tasks were still in the early planning stage.

In addition to the rulemaking authority, the Dodd-Frank Act expands 

ASC’s enforcement tools. As previously discussed, ASC’s only 

enforcement option prior to the act was derecognition of a state’s 

appraiser regulatory program. The act gives ASC the authority to remove 

a state-licensed or -certified appraiser or a registered AMC from the 

national registry on an interim basis, not to exceed 90 days, pending state 

agency action on licensing, certification, registration, and disciplinary 

proceedings. It also authorizes ASC to impose (unspecified) interim 

actions and suspensions against a state agency as an alternative to, or in 

advance of, the derecognition of the agency.59

ASC has yet to implement these authorities and will face a number of 

decisions and challenges in doing so. ASC officials told us they would use 

their new rulemaking authority to promulgate regulations for removing an 

appraiser from the national registry. As part of the rulemaking, ASC 

officials said they plan to develop criteria for circumstances that warrant 

removal as well as due process procedures. Several appraisers we spoke 

with stressed the importance of having a process that will allow them to 

defend themselves prior to a removal action.

Many appraisal industry 

stakeholders we spoke with supported ASC’s new authorities because 

they will allow ASC to take a more flexible, targeted approach to 

enforcement.

60

 

59FDIC officials told us that ASC had the authority to remove an appraiser from the 

national registry prior to the Dodd-Frank Act, but only after a state had taken a major 

disciplinary action such as suspension or revocation of an appraiser’s license. In addition, 

ASC’s former General Counsel told us that ASC had informally removed appraisers when 

criminal actions were being investigated by state officials because of the length of time it 

took to resolve such cases.

Officials from state bank 

60One of these appraisers noted that temporary removal from the registry could result in 

loss of income and informal blacklisting even if the appraiser is ultimately absolved.
Page 31 GAO-12-147 Appraisal Subcommittee

regulatory agencies told us that ASC may face challenges in collecting 

sufficient documentary evidence to justify removing an appraiser from the 

national registry because evidence collection is resource intensive. ASC 

officials said that determining the interim actions and suspensions they 

would take against state agencies also would be done through 

rulemaking, which can be a time-consuming process. Officials from 

several state appraiser regulatory agencies said that for such actions to 

be effective, they should be directed to higher levels of state government 

because the agencies have limited authority to make resource decisions 

or implement major changes. For example, some state appraiser 

regulatory agencies report to other agencies that control budget and 

policy decisions.

ASC confronts the challenge of implementing the tasks associated with 

the Dodd-Frank Act with limited resources. As previously noted, ASC has 

a small staff and, in recent years, its revenues have declined while its 

expenses have grown. ASC has 10 staff members, including an 

Executive Director, a Deputy Executive Director, a General Counsel, 4 

Policy Managers, an Information Management Specialist, and 2 

Administrative Officers.

ASC’s revenues—which come exclusively from national registry fees—

rose (in nominal dollars) from $2.2 million in fiscal year 2000 to a peak of 

$3.2 million in fiscal year 2007 but declined to $2.8 million in fiscal year 

2010 (see fig. 3). According to ASC officials, revenue from registry fees 

allowed ASC to carry out its Title XI responsibilities and accumulate 

approximately $6 million in reserves by fiscal year 2008. However, since 

2007, the number of appraiser credentials in the registry has declined 

each year, causing ASC’s revenues to shrink. Pursuant to a Dodd-Frank 

Act provision, ASC increased its registry fee from $25 to $40 (a 60 

percent increase) effective January 2012, which will likely increase ASC’s 

revenues.61 However, because the number of appraisers has been 

declining—by about 9.4 percent from 2007 through 2010—the fee 

increase may not result in a proportional rise in revenue.62

 61Pub. L. No. 111-203, § 1473(h)(1)(A) (codified at 12 U.S.C. § 3338(a)(4)(A)).

To illustrate, 

ASC’s revenue in 2014 would be about $4.4 million if the number of 

62In November 2011, ASC’s Executive Director told us that the number of credentials in 

the national registry had fallen to about 106,000. 

ASC Faces Resource 

Challenges and Is 

Developing a Strategic 

Plan
Page 32 GAO-12-147 Appraisal Subcommittee

appraiser credentials stayed at 2010 levels but would be about $4.0 

million if the number of appraiser credentials fell by another 9.4 percent 

from 2011 through 2014.63 Although the Dodd-Frank Act also authorized 

ASC to collect registry fees from AMCs, revenues from this source may 

not be available for several years because regulations for AMC 

registration must be developed and implemented first.64

Figure 3: ASC Revenues and Expenses, Fiscal Years 2000-2010

 

63From 2007 to 2010, the number of appraiser credentials dropped from 121,407 to 

110,026 (-9.37 percent). In 2010, the 110,026 appraiser credentials generated 

approximately $2.8 million in revenue (based on the $25 fee). If the number of appraiser 

credentials remains constant, the new $40 fee will generate about $4.4 million in 2014, a 

60 percent increase over 2010. However, if the number of appraisal credentials drops by 

another 9.37 percent from 2011 to 2014 (i.e., from 110,026 to 99,717), the fee increase 

would generate about $4.0 million (based on the $40 fee) in 2014. This would represent a 

45 percent increase in revenues compared with 2010. These calculations assume full 

implementation of the fee increase by 2014. 

64Pub. L. No. 111-203, § 1473(h)(1)(A) (codified at 12 U.S.C. § 3338(a)(4)(B).
Page 33 GAO-12-147 Appraisal Subcommittee

As shown in figure 3, ASC’s total expenses in nominal dollars increased 

from $2.2 million in fiscal year 2000 to $3.6 million in fiscal year 2010. 

ASC’s total expenses include operating expenses and grants to the 

Appraisal Foundation, both of which rose over that period. Operating 

expenses grew from $1.3 million in fiscal year 2000 to $2.3 million in 

fiscal year 2010, primarily due to an increase in personnel and 

administrative costs for conducting more frequent state compliance 

reviews. Grants to the Appraisal Foundation grew from $916,000 in fiscal 

year 2000 to $1.3 million in fiscal year 2010, partly to fund state 

investigator training courses. In fiscal years 2009 and 2010, ASC’s 

expenses exceeded its revenues by $380,581 and $782,046, 

respectively. ASC used reserve funds to cover these amounts, reducing 

the reserve to $4.8 million by the end of fiscal year 2010.

In light of these resource and implementation challenges, ASC officials 

began developing a strategic plan in May 2011 that encompasses both its 

existing activities and its new responsibilities and authorities under the 

Dodd-Frank Act. ASC also developed a more limited project plan that 

focuses specifically on tasks and milestones stemming from the act. 

According to an ASC board member, ASC did not previously have a 

strategic plan, due partly to stability in its functions over the years. The 

board member said that the new responsibilities contained in the DoddFrank Act prompted them to undertake a full strategic planning effort. 

ASC officials told us that they hoped to complete the plan by the end of 

2011.

ASC officials told us that their strategic plan would include a mission 

statement and goals but did not provide specific information about the 

expected contents of their plan. Although ASC is not subject to the GPRA 

Modernization Act of 2010 (GPRAMA)—which amends the Government 

Performance and Results Act of 1993 (GPRA)—ASC officials told us that 

their plan would include GPRAMA’s general components.65

 

65Pub. L. No. 111-352, 124 Stat. 3866. 

GPRAMA 

provides federal agencies with an approach to focusing on results and 

improving government performance by, among other things, developing 

strategic plans. Examples of GPRAMA plan components include a 

comprehensive agency mission statement; general goals and objectives, 

including outcome-oriented goals; and a description of how the goals and 
Page 34 GAO-12-147 Appraisal Subcommittee

objectives are to be achieved, including the processes and resources 

required. 

Our analysis of HMDA data found that approximately 71 percent of firstlien mortgages for single-family (one- to four-unit) homes originated from 

calendar years 2006 through 2009 were less than or equal to $250,000—

the regulatory threshold at or below which appraisals are not required for 

federally related transactions.66 As shown in figure 4, the percentage 

varied little by origination year, ranging from a low of 69 percent in 2006 

to a high of 73 percent in 2008.67 For all four years combined, 41 percent 

of the mortgages were $150,000 or less, and 30 percent were from 

$150,001 to $250,000. For the same 4-year period, we found that about 

22 percent of mortgages for residential multifamily structures were at or 

below the $250,000 threshold, as were about 98 percent of mortgages for 

manufactured housing.68

 

66This figure excludes mortgages for manufactured homes. We examined HMDA data for 

manufactured and multifamily properties separately. Data limitations prevented similar 

analysis of real estate-secured business loans, which have an appraisal exemption 

threshold of $1 million. The volume of business loans that are $1 million or less—

commonly referred to as small business loans—is substantial. According to an analysis by 

the Federal Reserve Bank of Richmond, $372 billion in small business loans secured by 

commercial real estate were made in 2009. However, some portion of those loans may 

not have met regulatory criteria for the appraisal exemption, which requires the primary 

source of repayment to be operating cash flow from the business rather than rental 

income or the sale of real estate.

67The 2009 data were the most recent data for which we could complete our data 

processing and reliability steps within the time frame of our review. 

68For purposes of HMDA reporting, a multifamily property is a residential structure that 

houses five or more families. Even though apartment and condominium buildings can 

house five or more families, they comprise individual ownership-deeded units reported as 

one-to-four family dwellings. HMDA reporting uses HUD’s definition of manufactured 

housing, which is housing that is factory-built and essentially ready for occupancy upon 

leaving the factory and being transported to a building site. 

Most Recent 

Mortgages Were 

Below the Threshold 

for Appraisal 

Exemption, and 

Stakeholder Views on 

the Threshold Vary
Page 35 GAO-12-147 Appraisal Subcommittee

Figure 4: Percentage of First-Lien Mortgages for Single-Family Homes Above and 

Below $250,000, 2006-2009 Originations

Note: Figure excludes mortgages for manufactured homes.

The proportions of mortgages originated from 2006 through 2009 that 

were below the threshold varied considerably by state. The percentage of 

first-lien mortgages for single-family homes that were less than or equal 

to $250,000 ranged from a low of 32 percent in California and Hawaii to a 

high of 95 percent in North Dakota. Two states, New Mexico and South 

Carolina, represented the median percentage of 82 percent (see fig. 5.) 

The only places in which more than half of the mortgage originations were 

greater than $250,000 were California, the District of Columbia, and 

Hawaii. In states that experienced some of the steepest declines in house 

prices during the 4 years we examined, the proportion of annual 

mortgage originations that fell below the threshold increased substantially 

over the period. For example, the proportion rose 25 percentage points in 

Nevada, 17 percentage points in California, and 8 percentage points in 

both Arizona and Florida.69

 

69The proportion rose from 55.6 percent to 80.2 percent in Nevada, 25.1 percent to 42.4 

percent in California, 72.4 percent to 80.2 percent in Florida, and 70.2 to 78.6 in Arizona. 

According to FHFA’s purchase-only house price index, these four states had the greatest 

decline in average home prices from the first quarter of 2006 through the fourth quarter of 

2009. 
Page 36 GAO-12-147 Appraisal Subcommittee

Figure 5: Percentage of First-Lien Mortgages for Single-Family Homes at or Below $250,000 by State, 2006-2009 Originations 

Combined

Note: Figure excludes mortgages for manufactured homes.

Despite the sizable proportion of residential mortgages at or below 

$250,000, the threshold has had limited impact in recent years on the 

percentage of mortgages with an appraisal because mortgage lenders, 

investors, and insurers generally require them for mortgages, regardless 

of amount. Due to the sharp contraction of the private mortgage market 

that began in 2007, the large majority of mortgage originations are 

currently purchased or insured by the enterprises and HUD’s Federal 

Housing Administration (FHA), which require appraisals on most 

mortgages.70 In 2010, enterprise-backed mortgages accounted for more 

than 65 percent of the market and FHA-insured mortgages accounted for 

about 20 percent.71

 

70Regulations exempt loans that qualify for sale to the enterprises or are insured or 

guaranteed by a federal agency from Title XI appraisal requirements. OCC: 12 C.F.R. Part 

34, subpart C; Federal Reserve: 12 C.F.R. Part 208, subpart E and 12 C.F.R. Part 225, 

subpart G; FDIC: 12 C.F.R. Part 323; NCUA: 12 C.F.R Part 722.

As we reported in July 2011, data for the two 

71These market shares are expressed in terms of dollar volume and do not include home 

equity loans. 
Page 37 GAO-12-147 Appraisal Subcommittee

enterprises combined showed that they required appraisals for 85 percent 

of the mortgages they bought in 2010 and 94 percent of the mortgages 

they bought in 2009 that were underwritten using their automated 

underwriting systems.72 FHA requires appraisals for all of the home 

purchase mortgages and most of the refinance mortgages it insures. 

Furthermore, lender valuation policies may exceed investor or insurer 

requirements in some situations. For example, lender risk-management 

policies may require the lender to obtain an appraisal even when the 

enterprises do not, or the lender may obtain an appraisal to better ensure 

that the mortgage complies with requirements for sale to either of the 

enterprises.

The $250,000 threshold could become more consequential if the roles of 

the enterprises and FHA are scaled back in the future. The administration 

and Congress are considering options that would diminish the federal role 

in mortgage finance and help transition to a more privatized market by 

winding down the enterprises and reducing the size of FHA.73 If this were 

to occur, the proportion of mortgage originations not subject to the 

appraisal requirements of these entities could increase. If private 

investors and insurers were to impose less stringent appraisal 

requirements than the enterprises or FHA, more mortgages of $250,000 

or less may not receive an appraisal. However, whether the private 

market will require appraisals for mortgages below the threshold is 

unclear at this time.

 

72GAO-11-653. Available enterprise data for 2006 through 2008 showed that appraisals 

were required for almost 90 percent of mortgages, although the data covered a smaller 

proportion of the enterprises’ total mortgage purchases than the data for 2009 through 

2010. Because the enterprises’ requirements are minimum requirements, lenders can and 

sometimes do exceed them. The enterprises do not require an appraisal when their 

underwriting analysis indicates that the default risk of a mortgage is sufficiently low to 

instead require validation of the sales price (or loan amount in the case of a refinance) by 

an AVM-generated estimate of value.

73Department of the Treasury and Department of Housing and Urban Development, 

Reforming America’s Housing Finance Market: A Report to Congress (February 2011).
Page 38 GAO-12-147 Appraisal Subcommittee

The perspectives of appraisal industry stakeholders we spoke with—

including appraisers, lenders, and federal and state regulators—did not 

provide a consensus view on whether or how the $250,000 threshold or 

the $1 million threshold that applies to real estate-secured business loans 

should be revised. Although no stakeholders advocated higher 

thresholds, a number recommended lowering or eliminating them, while 

others thought no changes were necessary. In addition, some 

stakeholders suggested alternatives to fixed, national dollar thresholds.

Appraiser industry groups, lending industry representatives, and some of 

the state regulators we contacted said that the appraisal exemption 

thresholds should be lower, in part to help manage the risk assumed by 

lending institutions. For example, 14 of the 50 state appraiser regulatory 

agencies that responded to our survey indicated that the $250,000 

threshold should be lowered to either $50,000 or $100,000. Several of the 

parties we spoke with pointed out that the median sales price of homes in 

the United States is below $250,000, which exempts numerous mortgage 

transactions from regulatory appraisal requirements. An NCUA official 

noted that in large numbers, smaller home mortgages or business loans 

can pose the same risks to lending institutions as larger ones, so smaller 

loans should not necessarily be exempt from appraisal requirements. 

Additionally, appraisal industry stakeholders indicated that “evaluations” 

that may be performed as an alternative to an appraisal may include 

methods that are less credible and reliable, such as AVMs. These 

stakeholders acknowledged that while appraisal requirements are 

currently driven by the enterprises and FHA, the roles of these entities 

could change.

Additionally, while appraisals for residential mortgages are not intended to 

validate the purchase price of the property in question, some 

stakeholders believe that they serve a consumer protection function by 

providing objective information about the market value of a property that 

consumers can use in making buying decisions. One appraisal industry 

representative said this information can help homebuyers avoid 

immediately owing more on a property than the property is worth, a 

situation that can make resale or refinancing difficult or cost-prohibitive. 

The Dodd-Frank Act requires that any revisions to the $250,000 threshold 

Appraisal Industry 

Stakeholders Have 

Differing Views on 

Revising the Exemption 

Thresholds 
Page 39 GAO-12-147 Appraisal Subcommittee

take into account consumer protection considerations through the 

concurrence of CFPB.74

Other appraisal industry stakeholders, including some state appraiser and 

bank regulatory officials, felt that the appraisal thresholds should remain 

where they are. For example, 17 of the 50 state appraiser regulatory 

agencies that responded to our survey indicated that the $250,000 

threshold should not be changed. A few of these stakeholders stated that 

lowering the threshold would potentially require more homebuyers to pay 

for appraisals, which are generally more expensive than other valuation 

methods. For example, according to mortgage industry participants, a 

typical appraisal can cost a consumer $300 to $450 on average, while a 

property valuation by an AVM can cost $5 to $25.75

Some appraisal industry stakeholders said that changes in real estate 

market conditions and variation in housing markets argued for thresholds 

tied to median property values at the state or regional level. For example, 

some of the respondents to our state survey noted that a national 

$250,000 threshold is largely irrelevant in some areas of the country. As 

previously shown in figure 5, in several states, over 90 percent of recent 

mortgages were $250,000 or less. Some stakeholders felt that the 

thresholds should not be based solely on the loan amount and should 

include other factors that affect credit risk, such as the borrower’s debt 

burden.

In addition, one 

appraisal industry participant said that lower thresholds could subject 

more real estate-related transactions for which an appraisal is not 

necessary to appraisal requirements. For example, he indicated that 

when the property in question is collateral for a loan that is much less 

than the probable value of the property, a cheaper and faster valuation 

method such as an AVM may be sufficient. An FDIC official said it was 

not clear that the exemption thresholds needed to be revised and noted 

that even for transactions below the thresholds, regulated financial 

institutions are expected to have a risk-based approach that determines 

when they will use an appraisal versus another method.

 74Pub. L. No. 111-203, § 1473(a) (codified at 12 U.S.C. § 3341(b)). 

75Appraisal costs can vary considerably depending on the location and size of the 

property, among other factors. See GAO-11-653. 
Page 40 GAO-12-147 Appraisal Subcommittee

The critical role of real estate appraisals in mortgage underwriting 

underscores the importance of effective regulation of the appraisal 

industry. Title XI of FIRREA created a complex regulatory structure that 

relies upon the actions of many state, federal, and private entities to help 

ensure the quality of appraisals and the qualifications of appraisers used 

in federally related transactions. ASC performs an important function 

within that structure by, among other things, monitoring the requirements 

and activities of some of the key entities—state appraiser regulatory 

agencies, the federal financial institutions regulators, and the Appraisal 

Foundation. Although ASC is carrying out its monitoring function, it has 

not developed appropriate policies and procedures for some of its 

activities, potentially limiting its effectiveness. First, ASC could improve 

how it assesses and reports on states’ overall compliance with Title XI. 

Specifically, developing and disclosing clear definitions of the compliance 

categories could help ensure consistent and transparent application of the 

categories and provide more useful information to Congress about states’ 

implementation of Title XI. Second, ASC could better delineate its role in 

monitoring the appraisal requirements of the federal financial institutions 

regulators and thereby strengthen accountability for this function. Third, 

ASC could enhance its policies for determining which Appraisal 

Foundation activities are eligible for grants to help ensure consistent 

funding decisions and improve the transparency of the grant process. 

Addressing these areas would also improve ASC’s compliance with 

federal internal control standards designed to promote the effectiveness 

and efficiency of agency operations.

Provisions in the Dodd-Frank Act will help ASC carry out its Title XI 

monitoring functions but will also create challenges that will require 

effective long-term planning. The limited rulemaking and enhanced 

enforcement authorities the act provides to ASC address prior 

weaknesses in its ability to promote states’ compliance with Title XI. 

Implementing these authorities will involve significant follow-on steps, 

including drafting regulations and developing criteria and processes to 

remove problem appraisers from the national registry. Other tasks 

stemming from the Dodd-Frank Act, such as establishing an appraiser 

hotline and a state grant program, require resources and involve difficult 

decisions. ASC is facing these tasks at a time when its costs have been 

increasing, and its revenues from national registry fees have fallen 

because of a decline in the number of appraisers. To help address these 

challenges, ASC has for the first time undertaken a strategic planning 

process. Although this process was not far enough along for us to 

examine the details of ASC’s plan, setting goals and identifying processes 

Conclusions 
Page 41 GAO-12-147 Appraisal Subcommittee

and resources necessary to achieve them could help ASC align its new 

responsibilities with its mission and aid in resource allocation decisions.

To help ensure effective implementation of ASC’s Title XI and DoddFrank Act responsibilities and improve compliance with federal internal 

control standards, we recommend that the Chairman of ASC direct the 

ASC board and staff to take the following three actions:

• clarify the definitions used to categorize states’ overall compliance 

with Title XI and include them in ASC’s compliance review and policy 

and procedures manuals, compliance review reports to states, and 

annual reports to Congress;

• develop specific policies and procedures for monitoring the appraisal 

requirements of the federal financial institutions regulators and include 

them in ASC’s policy and procedures manual; and

• develop specific criteria for assessing whether the grant activities of 

the Appraisal Foundation are Title XI-related and include these criteria 

in ASC’s policy and procedures manual.

We provided a draft of this report to ASC, CFPB, FDIC, the Federal 

Reserve, FHFA, HUD, NCUA, and OCC for their review and comment. 

We received written comments from the Chairman, ASC; the Assistant 

Director for Mortgage Markets, CFPB; the Executive Director, NCUA; and 

the Acting Comptroller of the Currency, which are reprinted in appendixes 

V through VIII. We also received technical comments from FDIC, the 

Federal Reserve, and OCC, which we incorporated where appropriate. 

FHFA and HUD did not provide comments on the draft report.

In their written comments, ASC, NCUA, and OCC agreed with our 

recommendations. ASC noted that it had already taken preliminary 

actions to address our recommendations and would consider the report’s 

findings as it continues to implement its new authority under the DoddFrank Act. OCC also acknowledged the challenges ASC faces in 

implementing its new responsibilities and authority under the act.

CFPB neither agreed nor disagreed with our recommendations but said 

that the report provided a comprehensive analysis of ASC’s role and 

highlighted resource and operating constraints that may challenge ASC’s 

ability to implement its new duties under the Dodd-Frank Act. CFPB also 

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
Page 42 GAO-12-147 Appraisal Subcommittee

noted that if federal regulators contemplate revising the $250,000 

appraisal exemption threshold, CFPB would evaluate whether the 

proposed change would provide reasonable protection for homebuyers. 

Additionally, CFPB indicated that it hoped to designate an ASC board 

member in the near future and that, in the meantime, CFPB serves on the 

ASC board in an advisory capacity.

We are sending copies of this report to the appropriate congressional 

committees, the Chairman of ASC, the Chairman of FFIEC, the Chairman 

of FDIC, the Chairman of the Federal Reserve, the Acting Director of 

FHFA, the Secretary of Housing and Urban Development, the Chairman 

of NCUA, the Acting Comptroller of the Currency, the Director of the 

Bureau of Consumer Financial Protection, and other interested parties. In 

addition, the report is available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-8678 or shearw@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix IX.

William B. Shear

Director, Financial Markets

 and Community Investment
Page 43 GAO-12-147 Appraisal Subcommittee

The Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act) requires GAO to examine the Appraisal Subcommittee’s (ASC) 

ability to carry out its functions, as well as related issues, including 

regulatory exemptions to appraisal requirements, state disciplinary 

actions against appraisers, and the extent to which a national appraisal 

repository would benefit ASC. Our objectives were to examine (1) how

ASC is performing its functions under Title XI of the Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (FIRREA) that existed 

prior to the passage of the Dodd-Frank Act, (2) ASC’s plans and actions 

to implement provisions in the Dodd-Frank Act, and (3) analysis and 

stakeholder views on existing dollar-based exemptions to appraisal 

requirements for federally related transactions. For the first objective and 

for information that appears in appendix II, we also examined the number 

of state-licensed and -certified appraisers, as of December 31, 2010, and 

the number of disciplinary actions that states took against appraisers from 

2001 through 2010. Finally, for information that appears in appendix III, 

we examined the views of appraisal industry stakeholders on the potential 

benefits and challenges of a national appraisal repository for ASC.

To determine how ASC is performing its Title XI functions that existed 

prior to the passage of the Dodd-Frank Act, we reviewed Title XI of 

FIRREA and its legislative history. We reviewed ASC’s policies and 

procedures, including its rules of operation, policy and procedures 

manual, policy statements, compliance review manual, bulletins, and 

notices. We consulted GAO’s Standards for Internal Control in the 

Federal Government and Internal Control Management and Evaluation 

Tool to assess ASC’s policies and procedures.1

We reviewed a wide range of ASC reports and records relating to each of 

ASC’s functions. With respect to ASC’s monitoring of states, we reviewed 

reports on ASC’s compliance reviews of states from 2007 through 2010, 

state response letters to compliance reviews, and summary statistics in 

ASC’s annual reports to Congress on the results of compliance reviews. 

We analyzed this information to determine how often ASC reviewed 

states, the type and frequency of noncompliance problems ASC 

identified, and the number of states in each of three overall compliance 

categories (“in substantial compliance,” “not in substantial compliance,” 

 

1

GAO/AIMD-00-21.3.1 and GAO-01-1008G. 

Appendix I: Objectives, Scope, and 

Methodology 

ASC’s Title XI Functions 

Prior to the Dodd-Frank 

Act
Page 44 GAO-12-147 Appraisal Subcommittee

and “not in compliance”). We identified states that ASC reviewed at least 

twice from 2007 through 2010 to determine any changes in these states’ 

overall compliance levels over that period. Regarding ASC’s monitoring of 

the federal financial institutions regulators, we reviewed ASC board 

minutes from 2003 through 2010, ASC’s annual reports to Congress for 

those years, and a 2007 internal review of ASC’s operations, which 

addressed this monitoring responsibility. With respect to ASC’s 

monitoring of the Appraisal Foundation, we reviewed foundation grant 

proposals, statements of work, and reimbursement requests from 2003 

through 2010; ASC decisions on grant proposals and reimbursement 

requests for that period; agreed-upon procedures reviews of the 

foundation from 2005 through 2010 by an independent auditing firm; and 

miscellaneous correspondence between ASC and the foundation. We 

also reviewed ASC’s annual reports to Congress and board meeting 

minutes from 2003 through 2010 to obtain information about the 

foundation’s activities and ASC’s monitoring process. Regarding the 

national registry, we analyzed selected information from ASC’s national 

registry database, including the number of active appraiser credentials by 

type and state as of December 31, 2010, and the number and types of 

disciplinary actions against appraisers that states took and reported from 

calendar years 2001 through 2010. To assess the reliability of the registry 

data, we (1) reviewed information related to data elements, system 

operations, and controls; (2) performed electronic testing for obvious 

errors in accuracy and completeness; and (3) interviewed ASC officials 

knowledgeable about the data. We concluded that the data elements we 

used were sufficiently reliable for our purposes.

In addition to our document review and data analysis, we interviewed 

current ASC staff, including the Executive Director, Deputy Executive 

Director, and General Counsel, as well as a former ASC General 

Counsel. We also interviewed ASC board members, which, at the time of 

our fieldwork, included officials from the Federal Deposit Insurance 

Corporation (FDIC), Board of Governors of the Federal Reserve System 

(Federal Reserve), Federal Housing Finance Agency (FHFA), 

Department of Housing and Urban Development (HUD), National Credit 

Union Administration (NCUA), Office of the Comptroller of the Currency 

(OCC), and Office of Thrift Supervision (OTS).2

 

2

The Dodd-Frank Act abolished the Office of Thrift Supervision in 2011.

We also interviewed 

officials from the Federal Financial Institutions Examination Council 
Page 45 GAO-12-147 Appraisal Subcommittee

(FFIEC); representatives of the Appraisal Foundation; state appraisal 

regulatory officials; and a range of other appraisal industry participants 

and stakeholders, including trade groups that represent appraisers and 

lenders, officials from the government-sponsored enterprises Fannie Mae 

and Freddie Mac (the enterprises), and officials from the Federal Bureau 

of Investigation (FBI).

Finally, to support this objective and our other reporting objectives, we 

conducted a Web-based survey of appraiser regulatory agencies from the 

50 states, the District of Columbia, and the U.S. territories of Guam, 

Northern Mariana Islands, Puerto Rico, and the Virgin Islands.3

GAO-12-198SP

During 

May 2011, we conducted four telephone pretests of the survey instrument 

with officials from different state regulatory agencies. The pretest results 

were incorporated into the survey questions as warranted. We fielded the 

survey to officials from the 55 state and territorial regulatory agencies on 

June 7, 2011. The survey had a closing deadline of July 8, 2011. Fifty of 

the 55 agencies completed the survey; the remaining five either did not 

start or did not finish the survey. Among other things, the survey collected 

information on how the state and territorial agencies carry out their Title 

XI responsibilities (including submitting data to the national registry and 

following up on complaints against appraisers); agency funding and 

staffing issues; and state views on ASC, appraisal-related provisions in 

the Dodd-Frank Act, and the $250,000 appraisal exemption threshold. 

The results are contained in an e-supplement to this report that includes 

the questions asked and a summary of the answers provided. View the esupplement at . 

To describe ASC’s plans and actions to implement Dodd-Frank Act 

provisions, we reviewed pertinent sections of the act and analyzed ASC 

records and other documents that described specific tasks stemming from 

the act and ASC’s progress in addressing them. These records and 

documents included ASC board meeting minutes, ASC Dodd-Frank Act 

summaries and implementation timelines, and Federal Register notices. 

We also interviewed ASC board members and staff about progress and 

challenges in implementing these tasks. To gain perspective on ASC’s 

resources for implementing the Dodd-Frank Act provisions, we reviewed 

 

3

In this appendix, we use the term “state” to refer to the 50 states, the District of Columbia, 

and the territories we surveyed. 

Implementation of DoddFrank Act Provisions
Page 46 GAO-12-147 Appraisal Subcommittee

information from ASC’s annual reports and financial statements. More 

specifically, we examined the number and responsibilities of ASC’s staff 

positions and ASC’s revenues, expenses, and reserves from fiscal years 

2001 through 2010. In addition, we estimated ASC’s fee revenues in 2014 

under two scenarios. The first assumed no change in the number of 

appraiser credentials after 2010, and the second assumed a 9.4 percent 

drop after 2010 (mirroring the decline that occurred from 2007 through 

2010). To examine ASC’s strategic planning efforts, we interviewed ASC 

board members and staff about their planning process and time frames. 

We also reviewed the GPRA Modernization Act (GPRAMA), which 

provides a framework for federal agency’s strategic plans.4

To examine existing dollar-based appraisal exemption thresholds, we 

analyzed data from FFIEC’s Home Mortgage Disclosure Act (HMDA) 

database and obtained stakeholder opinions about the thresholds. HMDA 

requires lending institutions to collect and publicly disclose information 

about housing loans and applications for such loans, including the loan 

type and amount, property type, and borrower characteristics. These data 

are the most comprehensive source of information on mortgage lending 

and are estimated to capture about 75 to 85 percent of conventional 

mortgages (those without government insurance or guarantees) and 90 to 

95 percent of mortgages insured by HUD’s Federal Housing 

Administration.5 Lenders with small total assets and lenders that do not 

have a home or branch office in a metropolitan statistical area do not 

have to report HDMA data. We analyzed HMDA data from 2006 through 

2009 to determine the proportion of mortgages less than or equal to 

$250,000—the regulatory threshold at or below which appraisals are not 

required for federally related transactions.6

 

4

Pub. L. No. 111-352. ASC is not subject to GPRAMA requirements, but ASC officials 

indicated their strategic plan would include GPRAMA’s general components 

We focused primarily on 

purchase and refinance mortgages for single-family (one-to-four unit) site5

According to enterprise and Federal Reserve officials, HMDA data do not capture all of 

the loans the enterprises purchase, including (1) many loans initially sold to intermediaries 

(e.g., bank affiliates) and subsequently to the enterprises and (2) loans originated and 

purchased in different years. In addition, the Federal Reserve has noted that turmoil in the 

housing and mortgage markets resulted in higher levels of nonreporting by lenders who 

ceased operations in 2007.

6

The 2009 data were the most recent data for which we could complete our data 

processing and reliability steps within the time frame of our review.

Dollar-Based Appraisal 

Exemption Thresholds
Page 47 GAO-12-147 Appraisal Subcommittee

built residences. At the national level and for each state, we calculated 

the proportion of these mortgages that were $250,000 or less by year of 

origination and for all 4 years combined. In addition, for each state, we 

calculated the change in the proportion of mortgages at or below the 

$250,000 threshold from 2006 through 2009. Using FHFA’s purchaseonly house price index, we also examined the extent to which states with 

large increases in the proportion of mortgages at or below the threshold 

also experienced large house price declines over the 4-year period. We 

analyzed mortgages for residential multifamily housing (five or more units) 

and manufactured housing separately and at the national level only. 

Specifically, we calculated the proportions of these mortgages that were 

at or below the $250,000 threshold, combining data for 2006 through 

2009. Due to a lack of readily available data, we were not able to perform 

a similar analysis for real estate-secured business loans, which have an 

appraisal exemption threshold of $1 million or less. To assess the data 

reliability of the HMDA data we used, we reviewed documentation on the 

process used to collect and ensure the reliability and integrity of the data; 

reviewed Federal Reserve and HUD analysis of the data’s market 

coverage; conducted reasonableness checks on data elements to identify 

any missing, erroneous, or outlying data; and spoke with officials from the 

Federal Reserve and the Bureau of Consumer Financial Protection (also 

known as the Consumer Financial Protection Bureau or CFPB) 

knowledgeable about the data. We concluded that the data we used were 

sufficiently reliable for our purposes.

To provide perspective on the impact of the $250,000 threshold, we relied 

on information in a report we issued in July 2011, which included 

information on the proportion of residential mortgage originations from 

2006 through 2010 that had appraisals. In that report, we indicated that 

the enterprises and the Federal Housing Administration (FHA) have 

commanded a large share of the mortgage market in recent years and 

that these entities require appraisals on the large majority of the 

mortgages they back, both above and below $250,000.7

To obtain stakeholder views on the $250,000 and $1 million thresholds, 

we interviewed ASC board members and staff; officials from the federal 

financial institutions regulators, FHFA, HUD, and CFPB; and 

representatives from the Appraisal Foundation and state appraiser

 

7

GAO-11-653. 
Page 48 GAO-12-147 Appraisal Subcommittee

regulatory agencies. We also interviewed other appraisal industry 

participants, including trade groups that represent appraisers and lenders 

and officials from the enterprises. Additionally, we drew on the results of 

our state survey, which included questions about the $250,000 threshold.

To obtain stakeholder views about whether new means of data collection, 

such as the establishment of a national appraisal repository, might assist 

ASC in carrying out its responsibilities, we interviewed ASC board 

members and staff; officials from federal financial institutions regulators, 

CFPB, FBI, FHFA, HUD, and the enterprises; representatives of the 

Appraisal Foundation; and state appraiser regulatory officials. We also 

interviewed representatives of trade groups that represent appraisers and 

lenders, as well as individual mortgage lenders, appraisers, and appraisal 

industry researchers.

We conducted this performance audit from November 2010 to January 

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

National Appraisal 

Repository 
Page 49 GAO-12-147 Appraisal Subcommittee

ASC’s national registry of state-licensed and -certified appraisers contains 

information on four classes of appraiser credentials: certified general, 

certified residential, licensed, and transitionally licensed.1 As of December 

31, 2010, the database reported nearly 110,000 active appraiser 

credentials.2

Table 3: Active Appraiser Credentials, by State and Type, as of December 31, 2010 

The number of appraiser credentials reported by state 

appraiser regulatory agencies ranged from 8 in the Northern Mariana 

Islands to 13,050 in California (see table 3.) Nationwide, certified general 

and certified residential appraiser credentials accounted for about 84 

percent of the total appraiser credentials.

Type of appraiser credential

Issuing state or U.S. territory

Certified 

general

Certified 

residential Licensed 

Transitionally 

licensed Total

Alabama 532 696 94 1,322 a

Alaska 108 126 a 234 a

Arizona 812 1,185 503 2,500 a

Arkansas 370 396 67 833 a

California 3,448 6,436 3,166 13,050 a

Colorado 1,148 1,461 655 3,264 a

Connecticut 552 926 a 1,478 a

Delaware 259 342 63 664 a

District of Columbia 262 276 200 738 a

Florida 2,124 4,597 31 6,752 a

Georgia 1,771 1,668 704 4,143 a

Guam 11 9 a 20 a

 

1

A certified general appraiser can perform any real property appraisal. A certified 

residential appraiser can perform appraisals for noncomplex, commercial real estate 

transactions valued at $250,000 or less and appraisals in connection with residential real 

estate of any value, without regard to complexity. A licensed appraiser can perform 

appraisals when the services of a certified appraiser are not required by statute or 

regulation. In most states, licensed appraisers may appraise noncomplex, one- to fourfamily residential transactions up to $1,000,000, and commercial real estate transactions 

up to $250,000. A transitionally licensed appraiser has passed a test but has not met all of 

the education or experience requirements for a state license. The Dodd-Frank Act 

effectively eliminates transitional licenses because it requires all practicing appraisers to 

meet or exceed Appraiser Qualifications Board requirements for a state license. 

2

Appraisers can hold credentials in more than one state. Therefore, at the national level, 

the total number of appraiser credentials is greater than the total number of appraisers.

Appendix II: Data on the Number of 

Appraiser Credentials and State Enforcement 

Actions Against Appraisers
Page 50 GAO-12-147 Appraisal Subcommittee

Type of appraiser credential

Issuing state or U.S. territory

Certified 

general

Certified 

residential Licensed 

Transitionally 

licensed Total

Hawaii 192 340 31 563 a

Idaho 292 339 122 753 a

Illinois 1,333 2,983 a 4,316 a

Indiana 727 1,116 408 2,251 a

Iowa 567 546 a 1,113 a

Kansas 472 467 187 1,126 a

Kentucky 520 818 21 1,359 a

Louisiana 450 803 a 1,253 a

Maine 262 203 236 701 a

Northern Mariana Islands 6 2 a 8 a

Maryland 731 1,223 809 2,763 a

Massachusetts 664 1,240 434 2,338 a

Michigan 1,018 1,022 1,073 3,113 a

Minnesota 811 1,093 231 2,135 a

Mississippi 524 478 348 1,350 a

Missouri 783 1,475 158 2,416 a

Montana 210 163 51 424 a

Nebraska 395 215 152 762 a

Nevada 469 595 200 1,264 a

New Hampshire 301 465 145 911 a

New Jersey 1,146 1,290 683 3,119 a

New Mexico 288 383 62 733 a

New York 1,653 2,403 397 4,453 a

North Carolina 1,085 2,066 152 3,303 a

North Dakota 131 39 50 220 a

Ohio 939 1,345 952 3,236 a

Oklahoma 388 457 211 1,056 a

Oregon 578 707 452 1,737 a

Pennsylvania 1,328 2,084 a 3,412 a

Puerto Rico 216 169 8 393 a

Rhode Island 172 279 91 542 a

South Carolina 841 1,128 314 2,283 a

South Dakota 169 67 74 310 a

Tennessee 690 1,005 167 1,862 a

Texas 2,382 2,495 648 22 5,547
Page 51 GAO-12-147 Appraisal Subcommittee

Type of appraiser credential

Issuing state or U.S. territory

Certified 

general

Certified 

residential Licensed 

Transitionally 

licensed Total

Utah 403 738 230 1,371 a

Vermont 162 144 66 372 a

Virgin Islands 15 9 3 27 a

Virginia 1,057 1,756 1,025 3,838 a

Washington 1,014 1,828 287 3,129 a

West Virginia 192 235 173 600 a

Wisconsin 623 1,057 451 2,131 a

Wyoming 198 123 a 321 a

Total 37,794 55,500 16,596 22 109,912

Source: GAO analysis of ASC national registry data.

a

Not applicable because the state either does not offer that type of credential or had no cases to 

report.

As previously noted, the national registry contains information on 

disciplinary actions taken and reported by state regulators. Table 4 

summarizes this information for calendar years 2001 through 2010.

Table 4: Number and Types of Appraiser Disciplinary Actions Reported by States, 2001-2010

State or 

U.S. territory

Revocation Suspen

-sion Probation Fine

Official 

reprimand

Voluntary 

surrender

DowngradeAdditional 

education Warning Other Total 

Alabama 6 28 3 2 9 13 a a a 61 a

Alaska 1 1 5 6 3 a 4 a 3 23 a

Arizona 26 21 45 2 a 30 1 a 319 a 444

Arkansas 2 15 122 2 5 a 13 a 74 a 233

California 55 18 34 200 1 70 40 a 13 22 453

Colorado 29 49 24 168 1 63 2 165 2 11 514

Connecticut 4 5 131 a 1 6 29 a 1 a 177

Delaware 1 12 4 3 10 a 9 a a 39 a

District of 

Columbia 2 4 8 17 2 a 2 a a 35 a 

Florida 221 168 530 447 1 16 96 a 1 1,480 a

Georgia 230 103 a a 31 a a a 97 a 461

Hawaii a a 8 a a a 2 a a 10 a

Idaho 4 10 48 117 3 4 86 a a 272 a

Illinois 77 78 15 60 10 1 1 12 309 3 566

Indiana 139 101 169 21 48 14 14 a 7 862 1,375
Page 52 GAO-12-147 Appraisal Subcommittee

State or 

U.S. territory

Revocation Suspen

-sion Probation Fine

Official 

reprimand

Voluntary 

surrender

DowngradeAdditional 

education Warning Other Total 

Iowa 10 5 44 28 17 28 68 a 3 1 204

Kansas 18 10 91 37 13 a 111 a 8 288 a

Kentucky 2 33 1 129 17 a 78 a 3 3 266

Louisiana 2 10 22 a a a a 14 a 48 a

Maine 19 17 14 92 51 6 52 a 11 3 265

Maryland 11 33 65 a 10 2 33 a 1 1 156

Massachusetts 12 6 58 64 149 26 3 a 6 324 a

Michigan 75 19 22 313 3 a 114 a a 546 a

Minnesota 59 35 1 314 27 a 35 a 21 3 495

Mississippi 7 12 26 2 a 4 38 a 1 216 306

Missouri 69 120 170 2 a 8 a a 1 28 398

Montana 7 8 17 31 1 a 30 a 2 a 96

Nebraska 1 6 6 2 8 a 2 49 14 a 88

Nevada 25 19 9 70 32 a 3 124 3 285 a

New 

Hampshire

2 7 45 a a a 30 a a 84 a

New Jersey 16 45 29 136 66 2 35 a 5 334 a

New Mexico 8 6 2 24 11 1 52 a 5 109 a

New York 114 78 98 a a a 23 a 48 1 362

North Carolina 13 143 3 a 38 38 1 148 6 390 a

North Dakota 1 3 11 a 4 a 8 a 1 a 28

Ohio 24 138 158 a 5 20 237 a 72 654 a

Oklahoma 166 120 6 62 3 15 3 30 2 9 416

Oregon 9 28 275 a 19 13 18 a 18 a 380

Pennsylvania 5 36 27 205 11 16 131 a a 431 a

Puerto Rico 2 a 8 a a a 1 a 8 a 19

Rhode Island 3 3 16 a 1 a 11 a 2 a 36

South Carolina 10 13 60 97 65 13 39 a 3 300 a

South Dakota 3 13 38 a 29 3 35 a 2 2 125

Tennessee 11 26 14 126 8 10 4 85 39 26 349

Texas 70 33 65 182 13 28 269 a 3 5 668

Utah 13 2 3 126 24 a 5 61 18 a 252

Vermont 2 4 1 4 2 a 7 a 12 3 35

Virginia 17 65 2 8 5 a 4 a 106 1 208

Washington 25 31 51 40 a a 10 a 8 165 a

West Virginia 3 27 24 37 11 a 29 a 2 a 133

Wisconsin 14 54 8 122 93 39 182 a 12 8 532
Page 53 GAO-12-147 Appraisal Subcommittee

State or 

U.S. territory

Revocation Suspen

-sion Probation Fine

Official 

reprimand

Voluntary 

surrender

DowngradeAdditional 

education Warning Other Total 

Wyoming 1 5 a 5 2 a 4 a 3 a 20

Total 1,644 1,823 1,774 4,164 719 639 22 2,656 730 1,767 15,938

Source: GAO analysis of ASC national registry data.

Note: According to an ASC official, the “other” category includes limitations on an appraiser’s ability to 

appraise certain types of property or suspension from supervising other appraisers. In general, only 

ASC and state regulatory agencies have access to the details of disciplinary actions classified as 

other.

a

Not applicable because the state either does not take that type of action or had no cases to report.
Page 54 GAO-12-147 Appraisal Subcommittee

The Dodd-Frank Act asked us to examine whether new means of data 

collection, such as the establishment of a national repository of appraisal 

information, would benefit ASC’s ability to perform its functions. We spoke 

with a range of appraisal industry stakeholders, including appraisers, 

lenders, regulators, and ASC officials about what a national repository 

might contain, its potential benefits and challenges, and the extent to 

which it would help ASC carry out its responsibilities.

The Dodd-Frank Act does not specify the information that a national 

appraisal repository would contain if one were to be created. Appraisal 

industry stakeholders we spoke with identified a number of possibilities, 

ranging from a compilation of scanned appraisal reports to a searchable 

database of appraisal information such as the location and characteristics 

of the subject property, name of the appraiser and mortgage lender, 

appraised value, and properties used as “comparables.”1 Some 

stakeholders indicated that a repository could potentially be linked to 

other data such as geographic information (e.g., digital maps), mortgage 

and borrower characteristics (e.g., status of mortgage payments), and 

housing market and economic statistics (e.g., local sales activity and 

rental and vacancy rates). Stakeholders said that multiple listing services 

and other proprietary databases contain some of this information.2

While the potential uses of a repository would depend on who had access 

to it, appraisal industry stakeholders identified a variety of benefits that a 

repository could provide. Some indicated that a repository could help 

regulators detect problematic appraisals and appraisers. For example, 

knowing the entities associated with every appraisal (e.g., appraiser, 

appraisal management company, and lender) could help regulators 

identify patterns of questionable behavior by individuals or firms. 

Additionally, the ability to view appraisals of the same property over time 

and appraisals for nearby properties could help regulators identify outliers 

(i.e., unusually high or low values) that may merit further investigation. 

Appraisers also could benefit from a repository by having access to 

additional data with which to perform their valuations. For example, one 

 

1

The most common appraisal approach is to find recent sales of comparable properties 

and make adjustments to the selling prices of those properties based on any differences 

between them and the subject property to estimate market value.

2

A multiple listing service is a database set up by a group of real estate brokers to provide 

information about properties sold and for sale.

Appendix III: Potential Benefits and 

Challenges of a National Appraisal 

Repository for ASC
Page 55 GAO-12-147 Appraisal Subcommittee

ASC board member said a repository that included the selling price of the 

comparables used in each appraisal would give appraisers access to 

sales information in states where such data are not publicly disclosed. In 

addition, industry stakeholders indicated that an appraisal repository 

could be integrated with mortgage portfolio information to help manage 

financial risk—for example, by assessing relationships between appraisal 

quality and loan performance. The government-sponsored enterprises 

Fannie Mae and Freddie Mac (the enterprises) have undertaken a joint 

effort, under the direction of FHFA that illustrates this concept. Known as 

the Uniform Mortgage Data Program (UMDP), this effort will collect 

consistent appraisal and loan data for all mortgages the enterprises 

purchase from lenders and will produce a proprietary dataset for use by 

the enterprises and FHFA.3

While a repository could provide some benefits, appraisal industry 

stakeholders also identified a number of challenges related to data 

collection and analysis, access rights, and resources. For example, they 

indicated that reporting of appraisal data would need to be more 

standardized for the repository to be useful. They also said questions 

exist about the extent to which appraisal reports are proprietary and could 

be included in a database that would potentially be widely accessible. 

Some stakeholders said analyzing data in a repository would not be 

straightforward because potential differences in the scope of work for 

each appraisal (e.g., an interior and exterior inspection versus an exterior 

inspection only) would complicate comparison of appraisal results. 

Additionally, some stakeholders expressed concerns about who would 

have access to the repository and whether broad access would encroach 

upon the privacy of appraisers. Further, a number of stakeholders and 

ASC officials said that a national repository could be very costly to create 

and maintain. They indicated that ASC was not the appropriate agency to 

develop a repository because it lacks the necessary resources. Some 

stakeholders also said that development of a repository would partially 

duplicate the enterprises’ efforts under UMDP.

According to officials from the enterprises, 

UMDP will allow the enterprises to work with lenders to resolve any 

concerns regarding appraisal quality prior to purchasing mortgages.

 

3

The enterprises are planning to fully implement UMDP by March 2012. FHFA officials 

told us that they had not made any decisions about whether to make the dataset available 

more widely. See GAO-11-653 for a fuller discussion of UMDP.
Page 56 GAO-12-147 Appraisal Subcommittee

Appraisal industry stakeholders and ASC officials questioned how much a 

national repository would help ASC carry out its monitoring 

responsibilities. They said that the high-level nature of ASC’s monitoring 

responsibilities did not require detailed information on individual 

appraisals. For example, ASC officials said it was unclear how a 

repository would help them monitor states’ appraiser regulatory programs, 

a process that involves examining state appraiser licensing and

certification requirements and assessing their compliance with Title XI. 

Other industry stakeholders said they were not sure how ASC could use a 

repository because ASC is not charged with assessing appraisal quality 

or proactively identifying individual appraisers or institutions responsible 

for problem appraisals.4

 

4

However, as discussed in the body of this report, the Dodd-Frank Act authorizes ASC to 

temporarily remove individual appraisers from the national registry, pending disciplinary 

action by a state. 

Additionally, one appraisal industry participant 

noted that analyzing information from a repository could require expertise 

and resources that ASC may not currently have.
Page 57 GAO-12-147 Appraisal Subcommittee

Subtitle F, Section 1473 of the Dodd-Frank Act, includes amendments to 

Title XI of FIRREA. These amendments expand ASC’s responsibilities 

and authorities. We identified 27 tasks for ASC stemming from the DoddFrank Act provisions. A description and the status of each task as of 

October 2011 is presented in the table below.

Table 5: Summary Description and Status of ASC Tasks Stemming from the Dodd-Frank Act, as of October 2011

Subsection 

of DoddFrank Act ASC task Status as of 

October 2011

1473(b) 1. Submit an annual report to Congress by June 15 of each year describing in detail how 

it carries out its assigned functions and the results of its state compliance reviews.

Addressed

2. In the annual report, include a description of the conditions causing any ASC 

disapprovals of state appraiser regulatory agencies (e.g., derecognition) and remedial 

actions taken by states.

To be addressed when 

ASC takes a disapproval 

action

1473(c) 3. Hold public sessions but may close certain portions of these meetings (e.g., those 

portions related to personnel or preliminary state compliance reports).

Addressed

4. Describe matters discussed in closed sessions in Federal Register notices. Addressed 

1473(d) 5. Implement authority to prescribe regulations for four areas (temporary practice, 

national registry, information sharing, and enforcement) and establish an industry 

advisory committee for this purpose.

To be addressed if ASC 

exercises this 

discretionary authority 

1473(f) 6. Monitor states’ requirements for registration and supervision of appraisal management 

companies (AMC). 

To be addressed when 

federal regulators 

establish requirements 

for state AMC 

registration

7. Maintain a national registry of AMCs. To be addressed when 

federal regulators 

establish requirements 

for state AMC 

registration

1473(g) 8. Require states to report on their supervision of AMCs or other third-party appraisal 

providers.

To be addressed when 

federal regulators 

establish requirements 

for state AMC 

registration

1473(h) 9. Collect increased annual registry fees from appraisers. To be addressed when 

fee increase becomes 

effective in January 2012

10. Implement authority to impose a minimum annual registry fee for AMCs. To be addressed when 

states register AMCs

11. Subject to the approval of FFIEC, adjust the registry fees up to a maximum of $80 per 

annum, as necessary to carry out its functions.

Addressed

12. Consider at least once every 5 years whether to adjust the dollar amount of the 

registry fees to account for inflation. 

Addressed

Appendix IV: Status of ASC Tasks Stemming 

from the Dodd-Frank Act
Page 58 GAO-12-147 Appraisal Subcommittee

Subsection 

of DoddFrank Act ASC task 

Status as of 

October 2011

13. Provide flexibility, when implementing any registry fee change, to the states for 

multiyear certifications and licenses already in place, as well as a transition period to 

implement the changes in registry fees. 

Addressed

14. Place incremental revenues collected based on fee increases in a separate account at 

the United States Treasury. 

Partially addressed. ASC 

is pursuing the 

establishment of an 

account for deposit of 

increased registration 

fees

1473(i) 15. Use amounts appropriated or collected to make grants to state appraiser certifying and 

licensing agencies and to inform states of surrendered, revoked, or suspended 

appraiser credentials.

To be addressed when 

new registration fees are 

collected

1473(j) 16. Notify states that appraiser licensing procedures and any state qualification 

requirements for trainee and supervisory appraisers must meet or exceed applicable 

Appraisal Qualifications Board criteria. 

Addressed

17. Implement authority to enforce qualification requirements for trainee and supervisory 

appraisers. 

To be addressed as part 

of state compliance 

reviews

1473(k) 18. Assess sufficiency of state appraiser regulatory agency funding and staffing as part of 

its state monitoring function.

To be addressed as part 

of state compliance 

reviews.

19. Implement authority to remove appraisers or a registered AMC from a national registry 

on an interim basis.

Not addressed

20. Implement authority to impose sanctions against a state agency that fails to have an 

effective appraiser regulatory program.

To be addressed when 

ASC is considering a 

disapproval action

1473(l) 21. Notify states of requirement to establish a reciprocity policy and consequences for 

failing to do so.

Addressed

1473(n) 22. Monitor state appraiser independence requirements, policies, and procedures. To be addressed as part 

of state compliance 

reviews

1473(o) 23. Encourage states to accept courses approved by the Appraiser Qualifications Board. Addressed

1473(p) 24. Determine by 6 months after law’s enactment whether a national hotline exists that 

meets the requirements of the Dodd-Frank Act. 

Addressed

25. Establish and operate such a national hotline with a toll-free telephone number and an 

e-mail address if one is determined not to exist. 

Partially addressed. ASC 

has researched how 

other agencies operate 

hotlines and is exploring 

potential hotline options.

1473(s) 26. Include Bureau of Consumer Financial Protection and Federal Housing Finance 

Agency as members. 

Addressed

27. At all times, have at least one board member who is a credentialed appraiser. Addressed

Sources: GAO analysis of the Dodd-Frank Act and ASC documents.
Appendix V: Comments from the Appraisal 

Subcommittee

Page 59 GAO-12-147 Appraisal Subcommittee

Appendix V: Comments from the Appraisal 

Subcommittee 
Appendix V: Comments from the Appraisal 

Subcommittee

Page 60 GAO-12-147 Appraisal Subcommittee
Appendix VI: Comments from the Consumer 

Financial Protection Bureau

Page 61 GAO-12-147 Appraisal Subcommittee

Appendix VI: Comments from the Consumer 

Financial Protection Bureau
Appendix VI: Comments from the Consumer 

Financial Protection Bureau

Page 62 GAO-12-147 Appraisal Subcommittee
Appendix VII: Comments from the National 

Credit Union Administration

Page 63 GAO-12-147 Appraisal Subcommittee

Appendix VII: Comments from the National 

Credit Union Administration
Appendix VII: Comments from the National 

Credit Union Administration

Page 64 GAO-12-147 Appraisal Subcommittee
Appendix VIII: Comments from the Office of 

the Comptroller of the Currency

Page 65 GAO-12-147 Appraisal Subcommittee

Appendix VIII: Comments from the Office of 

the Comptroller of the Currency
Appendix IX: GAO Contact and Staff 

Acknowledgments

Page 66 GAO-12-147 Appraisal Subcommittee

William B. Shear (202) 512-8678 or shearw@gao.gov

In addition to the individual named above, Steve Westley, Assistant 

Director; Alexandra Martin-Arseneau; Yola Lewis; John McGrail; Marc 

Molino; Carl Ramirez, Kelly Rubin; Jerome Sandau; Jennifer Schwartz; 

Andrew Stavisky; and Jocelyn Yin made key contributions to this report. 

Appendix IX: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(250571)
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