1613 
‘‘(B) A clear and prominent notice that the 
consumer is responsible for personally and di-
rectly paying the non-escrowed items, in addi-
tion to paying the mortgage loan payment, in 
the absence of any such account, and the fact 
that the costs for taxes, insurance, and related 
fees can be substantial. 
‘‘(C) A clear explanation of the con-
sequences of any failure to pay non-escrowed 
items, including the possible requirement for 
the forced placement of insurance by the cred-
itor or servicer and the potentially higher cost 
(including any potential commission payments 
to the servicer) or reduced coverage for the con-
sumer in the event of any such creditor-placed 
insurance. 
‘‘(D) Such other information as the Fed-
eral banking agencies jointly determine nec-
essary for the protection of the consumer.’’. 
(b) IMPLEMENTATION.— 
(1) REGULATIONS.—The Federal banking agen-
cies and the Federal Trade Commission shall pre-
scribe, in final form, such regulations as such agen-
cies determine to be necessary to implement the 
amendments made by subsection (a) before the end
1614 
of the 180-day period beginning on the date of the 
enactment of this Act. 
(2) EFFECTIVE DATE.—The amendments made 
by subsection (a) shall only apply in accordance with 
the regulations established in paragraph (1) and be-
ginning on the date occurring 180-days after the 
date of the publication of final regulations in the 
Federal Register. 
SEC. 9403. REAL ESTATE SETTLEMENT PROCEDURES ACT 
OF 1974 AMENDMENTS. 
(a) SERVICER PROHIBITIONS.—Section 6 of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 
2605) is amended by adding at the end the following new 
subsections: 
‘‘(k) SERVICER PROHIBITIONS.— 
‘‘(1) IN GENERAL.—A servicer of a federally re-
lated mortgage shall not— 
‘‘(A) obtain force-placed hazard insurance 
unless there is a reasonable basis to believe the 
borrower has failed to comply with the loan 
contract’s requirements to maintain property 
insurance; 
‘‘(B) charge fees for responding to valid 
qualified written requests (as defined in regula-
1615 
tions which the Secretary shall prescribe) under 
this section; 
‘‘(C) fail to take timely action to respond 
to a borrower’s requests to correct errors relat-
ing to allocation of payments, final balances for 
purposes of paying off the loan, or avoiding 
foreclosure, or other standard servicer’s duties; 
‘‘(D) fail to respond within 10 business 
days to a request from a borrower to provide 
the identity, address, and other relevant contact 
information about the owner assignee of the 
loan; or 
‘‘(E) fail to comply with any other obliga-
tion found by the Secretary, by regulation, to 
be appropriate to carry out the consumer pro-
tection purposes of this Act. 
‘‘(2) FORCE-PLACED
INSURANCE
DEFINED.— 
For purposes of this subsection and subsections (l) 
and (m), the term ‘force-placed insurance’ means 
hazard insurance coverage obtained by a servicer of 
a federally related mortgage when the borrower has 
failed to maintain or renew hazard insurance on 
such property as required of the borrower under the 
terms of the mortgage.
1616 
‘‘(l) REQUIREMENTS
FOR FORCE-PLACED INSUR-
ANCE.—A servicer of a federally related mortgage shall 
not be construed as having a reasonable basis for obtain-
ing force-placed insurance unless the requirements of this 
subsection have been met. 
‘‘(1) WRITTEN
NOTICES
TO
BORROWER.—A 
servicer may not impose any charge on any borrower 
for force-placed insurance with respect to any prop-
erty securing a federally related mortgage unless— 
‘‘(A) the servicer has sent, by first-class 
mail, a written notice to the borrower con-
taining— 
‘‘(i) a reminder of the borrower’s obli-
gation to maintain hazard insurance on the 
property securing the federally related 
mortgage; 
‘‘(ii) a statement that the servicer 
does not have evidence of insurance cov-
erage of such property; 
‘‘(iii) a clear and conspicuous state-
ment of the procedures by which the bor-
rower may demonstrate that the borrower 
already has insurance coverage; and 
‘‘(iv) a statement that the servicer 
may obtain such coverage at the borrower’s
1617 
expense if the borrower does not provide 
such demonstration of the borrower’s exist-
ing coverage in a timely manner; 
‘‘(B) the servicer has sent, by first-class 
mail, a second written notice, at least 30 days 
after the mailing of the notice under subpara-
graph (A) that contains all the information de-
scribed in each clause of such subparagraph; 
and 
‘‘(C) the servicer has not received from the 
borrower any demonstration of hazard insur-
ance coverage for the property securing the 
mortgage by the end of the 15-day period be-
ginning on the date the notice under subpara-
graph (B) was sent by the servicer. 
‘‘(2) SUFFICIENCY
OF
DEMONSTRATION.—A 
servicer of a federally related mortgage shall accept 
any reasonable form of written confirmation from a 
borrower of existing insurance coverage, which shall 
include the existing insurance policy number along 
with the identity of, and contact information for, the 
insurance company or agent. 
‘‘(3) TERMINATION OF FORCE-PLACED INSUR-
ANCE.—Within 15 days of the receipt by a servicer
1618 
of confirmation of a borrower’s existing insurance 
coverage, the servicer shall— 
‘‘(A) terminate the force-placed insurance; 
and 
‘‘(B) refund to the consumer all force- 
placed insurance premiums paid by the bor-
rower during any period during which the bor-
rower’s insurance coverage and the force-placed 
insurance coverage were each in effect, and any 
related fees charged to the consumer’s account 
with respect to the force-placed insurance dur-
ing such period. 
‘‘(4) CLARIFICATION WITH RESPECT TO FLOOD 
DISASTER PROTECTION ACT.—No provision of this 
section shall be construed as prohibiting a servicer 
from providing simultaneous or concurrent notice of 
a lack of flood insurance pursuant to section 102(e) 
of the Flood Disaster Protection Act of 1973. 
‘‘(m) LIMITATIONS ON FORCE-PLACED INSURANCE 
CHARGES.—All charges for force-placed insurance pre-
miums shall be bona fide and reasonable in amount.’’. 
(b) INCREASE IN PENALTY AMOUNTS.—Section 6(f) 
of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605(f)) is amended—
1619 
(1) in paragraphs (1)(B) and (2)(B), by strik-
ing ‘‘$1,000’’ each place such term appears and in-
serting ‘‘$2,000’’; and 
(2) 
in 
paragraph 
(2)(B)(i), 
by 
striking 
‘‘$500,000’’ and inserting ‘‘$1,000,000’’. 
(c) DECREASE IN RESPONSE TIMES.—Section 6(e) of 
the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605(e)) is amended— 
(1) in paragraph (1)(A), by striking ‘‘20 days’’ 
and inserting ‘‘5 days’’; 
(2) in paragraph (2), by striking ‘‘60 days’’ and 
inserting ‘‘30 days’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(4) 
LIMITED
EXTENSION
OF
RESPONSE 
TIME.—The 30-day period described in paragraph 
(2) may be extended for not more than 15 days if, 
before the end of such 30-day period, the servicer 
notifies the borrower of the extension and the rea-
sons for the delay in responding.’’. 
(d) PROMPT REFUND OF ESCROW ACCOUNTS UPON 
PAYOFF.—Section 6(g) of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2605(g)) is amended 
by adding at the end the following new sentence: ‘‘Any 
balance in any such account that is within the servicer’s
1620 
control at the time the loan is paid off shall be promptly 
returned to the borrower within 20 business days or cred-
ited to a similar account for a new mortgage loan to the 
borrower with the same lender.’’. 
SEC. 9404. TRUTH IN LENDING ACT AMENDMENTS. 
(a) REQUIREMENTS
FOR PROMPT CREDITING
OF 
HOME LOAN PAYMENTS.—Chapter 2 of the Truth in 
Lending Act (15 U.S.C. 1631 et seq.) is amended by in-
serting after section 129E (as added by section 9502) the 
following new section (and by amending the table of con-
tents accordingly): 
‘‘SEC. 129F. REQUIREMENTS FOR PROMPT CREDITING OF 
HOME LOAN PAYMENTS. 
‘‘(a) IN GENERAL.—In connection with a consumer 
credit transaction secured by a consumer’s principal dwell-
ing, no servicer shall fail to credit a payment to the con-
sumer’s loan account as of the date of receipt, except when 
a delay in crediting does not result in any charge to the 
consumer or in the reporting of negative information to 
a consumer reporting agency, except as required in sub-
section (b). 
‘‘(b) EXCEPTION.—If a servicer specifies in writing 
requirements for the consumer to follow in making pay-
ments, but accepts a payment that does not conform to
1621 
the requirements, the servicer shall credit the payment as 
of 5 days after receipt.’’. 
(b) REQUESTS FOR PAYOFF AMOUNTS.—Chapter 2 
of such Act is further amended by inserting after section 
129F (as added by subsection (a)) the following new sec-
tion (and by amending the table of contents accordingly): 
‘‘SEC. 129G. REQUESTS FOR PAYOFF AMOUNTS OF HOME 
LOAN. 
‘‘A creditor or servicer of a home loan shall send an 
accurate payoff balance within a reasonable time, but in 
no case more than 7 business days, after the receipt of 
a written request for such balance from or on behalf of 
the borrower.’’. 
SEC. 9405. ESCROWS INCLUDED IN REPAYMENT ANALYSIS. 
Section 128(b) of the Truth in Lending Act (15 
U.S.C. 1638(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) REPAYMENT ANALYSIS REQUIRED TO IN-
CLUDE ESCROW PAYMENTS.— 
‘‘(A) IN
GENERAL.—In the case of any 
consumer credit transaction secured by a first 
mortgage or lien on the principal dwelling of 
the consumer, other than a consumer credit 
transaction under an open end credit plan or a 
reverse mortgage, for which an impound, trust,
1622 
or other type of account has been or will be es-
tablished in connection with the transaction for 
the payment of property taxes, hazard and flood 
(if any) insurance premiums, or other periodic 
payments or premiums with respect to the 
property, the information required to be pro-
vided under subsection (a) with respect to the 
number, amount, and due dates or period of 
payments scheduled to repay the total of pay-
ments shall take into account the amount of 
any monthly payment to such account for each 
such repayment in accordance with section 
10(a)(2) of the Real Estate Settlement Proce-
dures Act of 1974. 
‘‘(B) ASSESSMENT
VALUE.—The amount 
taken into account under subparagraph (A) for 
the payment of property taxes, hazard and flood 
(if any) insurance premiums, or other periodic 
payments or premiums with respect to the 
property shall reflect the taxable assessed value 
of the real property securing the transaction 
after the consummation of the transaction, in-
cluding the value of any improvements on the 
property or to be constructed on the property 
(whether or not such construction will be fi-
1623 
nanced from the proceeds of the transaction), if 
known, and the replacement costs of the prop-
erty for hazard insurance, in the initial year 
after the transaction.’’. 
Subtitle F—Appraisal Activities 
SEC. 9501. PROPERTY APPRAISAL REQUIREMENTS. 
Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after 129G (as 
added by section 9404(b)) the following new section: 
‘‘SEC. 129H PROPERTY APPRAISAL REQUIREMENTS. 
‘‘(a) IN GENERAL.—A creditor may not extend credit 
in the form of a subprime mortgage to any consumer with-
out first obtaining a written appraisal of the property to 
be mortgaged prepared in accordance with the require-
ments of this section. 
‘‘(b) APPRAISAL REQUIREMENTS.— 
‘‘(1) PHYSICAL PROPERTY VISIT.—An appraisal 
of property to be secured by a subprime mortgage 
does not meet the requirement of this section unless 
it is performed by a qualified appraiser who con-
ducts a physical property visit of the interior of the 
mortgaged property. 
‘‘(2) SECOND APPRAISAL UNDER CERTAIN CIR-
CUMSTANCES.—
1624 
‘‘(A) IN GENERAL.—If the purpose of a 
subprime mortgage is to finance the purchase 
or acquisition of the mortgaged property from 
a person within 180 days of the purchase or ac-
quisition of such property by that person at a 
price that was lower than the current sale price 
of the property, the creditor shall obtain a sec-
ond appraisal from a different qualified ap-
praiser. The second appraisal shall include an 
analysis of the difference in sale prices, changes 
in market conditions, and any improvements 
made to the property between the date of the 
previous sale and the current sale. 
‘‘(B) NO COST TO APPLICANT.—The cost 
of any second appraisal required under sub-
paragraph (A) may not be charged to the appli-
cant. 
‘‘(3) QUALIFIED
APPRAISER
DEFINED.—For 
purposes of this section, the term ‘qualified ap-
praiser’ means a person who— 
‘‘(A) is, at a minimum, certified or licensed 
by the State in which the property to be ap-
praised is located; and 
‘‘(B) performs each appraisal in con-
formity with the Uniform Standards of Profes-
1625 
sional Appraisal Practice and title XI of the Fi-
nancial Institutions Reform, Recovery, and En-
forcement Act of 1989, and the regulations pre-
scribed under such title, as in effect on the date 
of the appraisal. 
‘‘(c) FREE COPY OF APPRAISAL.—A creditor shall 
provide 1 copy of each appraisal conducted in accordance 
with this section in connection with a subprime mortgage 
to the applicant without charge, and at least 3 days prior 
to the transaction closing date. 
‘‘(d) CONSUMER NOTIFICATION.—At the time of the 
initial mortgage application, the applicant shall be pro-
vided with a statement by the creditor that any appraisal 
prepared for the mortgage is for the sole use of the cred-
itor, and that the applicant may choose to have a separate 
appraisal conducted at their own expense. 
‘‘(e) VIOLATIONS.—In addition to any other liability 
to any person under this title, a creditor found to have 
willfully failed to obtain an appraisal as required in this 
section shall be liable to the applicant or borrower for the 
sum of $2,000. 
‘‘(f) SUBPRIME MORTGAGE DEFINED.—For purposes 
of this section, the term ‘subprime mortgage’ means a res-
idential mortgage loan, other than a reverse mortgage loan 
insured by the Federal Housing Administration, secured
1626 
by a principal dwelling with an annual percentage rate 
that exceeds the average prime offer rate for a comparable 
transaction, as of the date the interest rate is set— 
‘‘(1) by 1.5 or more percentage points, in the 
case of a first lien residential mortgage loan having 
an original principal obligation amount that does not 
exceed the amount of the maximum limitation on the 
original principal obligation of mortgage in effect for 
a residence of the applicable size, as of the date of 
such interest rate set, pursuant to the sixth sentence 
of section 305(a)(2) the Federal Home Loan Mort-
gage Corporation Act (12 U.S.C. 1454(a)(2)); 
‘‘(2) by 2.5 or more percentage points, in the 
case of a first lien residential mortgage loan having 
an original principal obligation amount that exceeds 
the amount of the maximum limitation on the origi-
nal principal obligation of mortgage in effect for a 
residence of the applicable size, as of the date of 
such interest rate set, pursuant to the sixth sentence 
of section 305(a)(2) the Federal Home Loan Mort-
gage Corporation Act (12 U.S.C. 1454(a)(2)); and 
‘‘(3) by 3.5 or more percentage points for a 
subordinate lien residential mortgage loan.’’.
1627 
SEC. 9502. UNFAIR AND DECEPTIVE PRACTICES AND ACTS 
RELATING TO CERTAIN CONSUMER CREDIT 
TRANSACTIONS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 129D (as added by section 9401(a)) the fol-
lowing new section: 
‘‘SEC. 129E. UNFAIR AND DECEPTIVE PRACTICES AND ACTS 
RELATING TO CERTAIN CONSUMER CREDIT 
TRANSACTIONS. 
‘‘(a) IN GENERAL.—It shall be unlawful, in extending 
credit or in providing any services for a consumer credit 
transaction secured by the principal dwelling of the con-
sumer, to engage in any unfair or deceptive act or practice 
as described in or pursuant to regulations prescribed 
under this section. 
‘‘(b) APPRAISAL INDEPENDENCE.—For purposes of 
subsection (a), unfair and deceptive practices shall in-
clude— 
‘‘(1) any appraisal of a property offered as se-
curity for repayment of the consumer credit trans-
action that is conducted in connection with such 
transaction in which a person with an interest in the 
underlying transaction compensates, coerces, extorts, 
colludes, instructs, induces, bribes, or intimidates a 
person conducting or involved in an appraisal, or at-
1628 
tempts, to compensate, coerce, extort, collude, in-
struct, induce, bribe, or intimidate such a person, 
for the purpose of causing the appraised value as-
signed, under the appraisal, to the property to be 
based on any factor other than the independent 
judgment of the appraiser; 
‘‘(2) 
mischaracterizing, 
or 
suborning 
any 
mischaracterization of, the appraised value of the 
property securing the extension of the credit; 
‘‘(3) seeking to influence an appraiser or other-
wise to encourage a targeted value in order to facili-
tate the making or pricing of the transaction; and 
‘‘(4) withholding or threatening to withhold 
timely payment for an appraisal report or for ap-
praisal services rendered. 
‘‘(c) EXCEPTIONS.—The requirements of subsection 
(b) shall not be construed as prohibiting a mortgage lend-
er, mortgage broker, mortgage banker, real estate broker, 
appraisal management company, employee of an appraisal 
management company, consumer, or any other person 
with an interest in a real estate transaction from asking 
an appraiser to provide 1 or more of the following services: 
‘‘(1) Consider additional, appropriate property 
information, including the consideration of addi-
1629 
tional comparable properties to make or support an 
appraisal. 
‘‘(2) Provide further detail, substantiation, or 
explanation for the appraiser’s value conclusion. 
‘‘(3) Correct errors in the appraisal report. 
‘‘(d) PROHIBITIONS ON CONFLICTS OF INTEREST.— 
No certified or licensed appraiser conducting, and no ap-
praisal management company procuring or facilitating, an 
appraisal in connection with a consumer credit transaction 
secured by the principal dwelling of a consumer may have 
a direct or indirect interest, financial or otherwise, in the 
property or transaction involving the appraisal. 
‘‘(e) MANDATORY REPORTING.—Any mortgage lend-
er, mortgage broker, mortgage banker, real estate broker, 
appraisal management company, employee of an appraisal 
management company, or any other person involved in a 
real estate transaction involving an appraisal in connection 
with a consumer credit transaction secured by the prin-
cipal dwelling of a consumer who has a reasonable basis 
to believe an appraiser is failing to comply with the Uni-
form Standards of Professional Appraisal Practice, is vio-
lating applicable laws, or is otherwise engaging in uneth-
ical or unprofessional conduct, shall refer the matter to 
the applicable State appraiser certifying and licensing 
agency.
1630 
‘‘(f) NO EXTENSION OF CREDIT.—In connection with 
a consumer credit transaction secured by a consumer’s 
principal dwelling, a creditor who knows, at or before loan 
consummation, of a violation of the appraisal independ-
ence standards established in subsections (b) or (d) shall 
not extend credit based on such appraisal unless the cred-
itor documents that the creditor has acted with reasonable 
diligence to determine that the appraisal does not materi-
ally misstate or misrepresent the value of such dwelling. 
‘‘(g) RULEMAKING PROCEEDINGS.—The Board, the 
Comptroller of the Currency, the Director of the Office 
of Thrift Supervision, the Federal Deposit Insurance Cor-
poration, the National Credit Union Administration 
Board, and the Federal Trade Commission— 
‘‘(1) shall, for purposes of this section, jointly 
prescribe regulations no later than 180 days after 
the date of the enactment of this section, and where 
such regulations have an effective date of no later 
than 1 year after the date of the enactment of this 
section, defining with specificity acts or practices 
which are unfair or deceptive in the provision of 
mortgage lending services for a consumer credit 
transaction secured by the principal dwelling of the 
consumer or mortgage brokerage services for such a
1631 
transaction and defining any terms in this section or 
such regulations; and 
‘‘(2) may jointly issue interpretive guidelines 
and general statements of policy with respect to un-
fair or deceptive acts or practices in the provision of 
mortgage lending services for a consumer credit 
transaction secured by the principal dwelling of the 
consumer and mortgage brokerage services for such 
a transaction, within the meaning of subsections (a), 
(b), (c), (d), (e), and (f). 
‘‘(h) PENALTIES.— 
‘‘(1) FIRST VIOLATION.—In addition to the en-
forcement provisions referred to in section 130, each 
person who violates this section shall forfeit and pay 
a civil penalty of not more than $10,000 for each 
day any such violation continues. 
‘‘(2) SUBSEQUENT VIOLATIONS.—In the case of 
any person on whom a civil penalty has been im-
posed under paragraph (1), paragraph (1) shall be 
applied by substituting ‘$20,000’ for ‘$10,000’ with 
respect to all subsequent violations. 
‘‘(3) ASSESSMENT.—The agency referred to in 
subsection (a) or (c) of section 108 with respect to 
any person described in paragraph (1) shall assess
1632 
any penalty under this subsection to which such per-
son is subject.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 129D (as 
added by section 9401(c)) the following new item: 
‘‘129E. Unfair and deceptive practices and acts relating to certain consumer 
credit transactions.’’. 
SEC. 9503. AMENDMENTS RELATING TO APPRAISAL SUB-
COMMITTEE OF FIEC, APPRAISER INDEPEND-
ENCE MONITORING, APPROVED APPRAISER 
EDUCATION, APPRAISAL MANAGEMENT COM-
PANIES, APPRAISER COMPLAINT HOTLINE, 
AUTOMATED 
VALUATION 
MODELS, 
AND 
BROKER PRICE OPINIONS. 
(a) CONSUMER PROTECTION MISSION.— 
(1) PURPOSES.—Section 1101 of the Financial 
Institutions Reform, Recovery, and Enforcement Act 
of 1989 (12 U.S.C. 3331) is amended by inserting 
‘‘and to provide the Appraisal Subcommittee with a 
consumer protection mandate’’ before the period at 
the end. 
(2) 
FUNCTIONS
OF
APPRAISAL
SUB-
COMMITTEE.—Section 1103(a) of the Financial In-
stitutions Reform, Recovery, and Enforcement Act 
of 1989 (12 U.S.C. 3332(a)) is amended—
1633 
(A) by striking ‘‘and’’ at the end of para-
graph (3); and 
(B) by amending paragraph (4) to read as 
follows: 
‘‘(4) monitor the efforts of, and requirements 
established by, States and the Federal financial in-
stitutions regulatory agencies to protect consumers 
from improper appraisal practices and the preda-
tions of unlicensed appraisers in consumer credit 
transactions that are secured by a consumer’s prin-
cipal dwelling; and’’. 
(3) THRESHOLD LEVELS.—Section 1112(b) of 
the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3341(b)) is 
amended by inserting before the period the fol-
lowing: ‘‘, and that such threshold level provides rea-
sonable protection for consumers who purchase 1–4 
unit single-family residences. In determining whether 
a threshold level provides reasonable protection for 
consumers, each Federal financial institutions regu-
latory agency shall consult with consumer groups 
and convene a public hearing’’. 
(b) 
ANNUAL
REPORT
OF
APPRAISAL
SUB-
COMMITTEE.—Section 1103(a) of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 1989 (12
1634 
U.S.C. 3332(a)) is amended at the end by inserting the 
following new paragraph: 
‘‘(5) transmit an annual report to the Congress 
not later than January 31 of each year that de-
scribes the manner in which each function assigned 
to the Appraisal Subcommittee has been carried out 
during the preceding year. The report shall also de-
tail the activities of the Appraisal Subcommittee, in-
cluding the results of all audits of State appraiser 
regulatory agencies, and provide an accounting of 
disapproved actions and warnings taken in the pre-
vious year, including a description of the conditions 
causing the disapproval and actions taken to achieve 
compliance.’’. 
(c) OPEN MEETINGS.—Section 1104(b) of the Finan-
cial Institutions Reform, Recovery, and Enforcement Act 
of 1989 (12 U.S.C. 3333(b)) is amended by inserting ‘‘in 
public session after notice in the Federal Register’’ after 
‘‘shall meet’’. 
(d) REGULATIONS.—Section 1106 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3335) is amended— 
(1) by inserting ‘‘prescribe regulations after no-
tice and opportunity for comment,’’ after ‘‘hold 
hearings’’; and
1635 
(2) at the end by inserting ‘‘Any regulations 
prescribed by the Appraisal Subcommittee shall (un-
less otherwise provided in this title) be limited to the 
following functions: temporary practice, national reg-
istry, information sharing, and enforcement. For 
purposes of prescribing regulations, the Appraisal 
Subcommittee shall establish an advisory committee 
of industry participants, including appraisers, lend-
ers, consumer advocates, and government agencies, 
and hold meetings as necessary to support the devel-
opment of regulations.’’. 
(e) APPRAISALS AND APPRAISAL REVIEWS.—Section 
1113 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3342) is amended— 
(1) by striking ‘‘In determining’’ and inserting 
‘‘(a) IN GENERAL.—In determining’’; 
(2) in subsection (a) (as designated by para-
graph (1)), by inserting before the period the fol-
lowing: ‘‘, where a complex 1-to-4 unit single family 
residential appraisal means an appraisal for which 
the property to be appraised, the form of ownership, 
the property characteristics, or the market condi-
tions are atypical’’; and 
(3) by adding at the end the following new sub-
section:
1636 
‘‘(b) APPRAISALS AND APPRAISAL REVIEWS.—All ap-
praisals performed at a property within a State shall be 
prepared by appraisers licensed or certified in the State 
where the property is located. All appraisal reviews, in-
cluding appraisal reviews by a lender, appraisal manage-
ment company, or other third party organization, shall be 
performed by an appraiser who is duly licensed or certified 
by a State appraisal board.’’. 
(f) APPRAISAL MANAGEMENT SERVICES.— 
(1) SUPERVISION OF THIRD PARTY PROVIDERS 
OF
APPRAISAL
MANAGEMENT
SERVICES.—Section 
1103(a) of the Financial Institutions Reform, Recov-
ery, and Enforcement Act of 1989 (12 U.S.C. 
3332(a)) (as previously amended by this section) is 
further amended— 
(A) by amending paragraph (1) to read as 
follows: 
‘‘(1) monitor the requirements established by 
States— 
‘‘(A) for the certification and licensing of 
individuals who are qualified to perform ap-
praisals in connection with federally related 
transactions, including a code of professional 
responsibility; and
1637 
‘‘(B) for the registration and supervision 
of the operations and activities of an appraisal 
management company;’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(7) maintain a national registry of appraisal 
management companies that either are registered 
with and subject to supervision of a State appraiser 
certifying and licensing agency or are operating sub-
sidiaries of a Federally regulated financial institu-
tion.’’. 
(2) APPRAISAL
MANAGEMENT
COMPANY
MIN-
IMUM QUALIFICATIONS.—Title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act 
of 1989 (12 U.S.C. 3331 et seq.) is amended by 
adding at the end the following new section (and 
amending the table of contents accordingly): 
‘‘SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM 
QUALIFICATIONS. 
‘‘(a) IN GENERAL.—The Appraiser Qualifications 
Board of the Appraisal Foundation shall establish min-
imum qualifications to be applied by a State in the reg-
istration of appraisal management companies. Such quali-
fications shall include a requirement that such compa-
nies—
1638 
‘‘(1) register with and be subject to supervision 
by a State appraiser certifying and licensing agency 
in each State in which such company operates; 
‘‘(2) verify that only licensed or certified ap-
praisers are used for federally related transactions; 
‘‘(3) require that appraisals coordinated by an 
appraisal management company comply with the 
Uniform Standards of Professional Appraisal Prac-
tice; and 
‘‘(4) require that appraisals are conducted inde-
pendently and free from inappropriate influence and 
coercion pursuant to the appraisal independence 
standards established under section 129E of the 
Truth in Lending Act. 
‘‘(b) EXCEPTION FOR FEDERALLY REGULATED FI-
NANCIAL INSTITUTIONS.—The requirements of subsection 
(a) shall not apply to an appraisal management company 
that is a subsidiary owned and controlled by a financial 
institution and regulated by a federal financial institution 
regulatory agency. In such case, the appropriate federal 
financial institutions regulatory agency shall, at a min-
imum, develop regulations affecting the operations of the 
appraisal management company to— 
‘‘(1) verify that only licensed or certified ap-
praisers are used for federally related transactions;
1639 
‘‘(2) require that appraisals coordinated by an 
institution or subsidiary providing appraisal manage-
ment services comply with the Uniform Standards of 
Professional Appraisal Practice; and 
‘‘(3) require that appraisals are conducted inde-
pendently and free from inappropriate influence and 
coercion pursuant to the appraisal independence 
standards established under section 129E of the 
Truth in Lending Act. 
‘‘(c) REGISTRATION
LIMITATIONS.—An appraisal 
management company shall not be registered by a State 
if such company, in whole or in part, directly or indirectly, 
is owned by any person who has had an appraiser license 
or certificate refused, denied, cancelled, surrendered in 
lieu of revocation, or revoked in any State. Additionally, 
each person that owns more than 10 percent of an ap-
praisal management company shall be of good moral char-
acter, as determined by the State appraiser certifying and 
licensing agency, and shall submit to a background inves-
tigation carried out by the State appraiser certifying and 
licensing agency. 
‘‘(d) REGULATIONS.—The Appraisal Subcommittee 
shall promulgate regulations to implement the minimum 
qualifications developed by the Appraiser Qualifications 
Board under this section, as such qualifications relate to
1640 
the State appraiser certifying and licensing agencies. The 
Appraisal Subcommittee shall also promulgate regulations 
for the reporting of the activities of appraisal management 
companies in determining the payment of the annual reg-
istry fee. 
‘‘(e) EFFECTIVE DATE.— 
‘‘(1) IN GENERAL.—No appraisal management 
company may perform services related to a federally 
related transaction in a State after the date that is 
36 months after the date of the enactment of this 
section unless such company is registered with such 
State or subject to oversight by a federal financial 
institutions regulatory agency. 
‘‘(2) EXTENSION OF EFFECTIVE DATE.—Sub-
ject to the approval of the Council, the Appraisal 
Subcommittee may extend by an additional 12 
months the requirements for the registration and su-
pervision of appraisal management companies if it 
makes a written finding that a State has made sub-
stantial progress in establishing a State appraisal 
management company registration and supervision 
system that appears to conform with the provisions 
of this title.’’. 
(3) STATE
APPRAISER
CERTIFYING
AND
LI-
CENSING AGENCY AUTHORITY.—Section 1117 of the
1641 
Financial Institutions Reform, Recovery, and En-
forcement Act of 1989 (12 U.S.C. 3346) is amended 
by adding at the end the following: ‘‘The duties of 
such agency may additionally include the registra-
tion and supervision of appraisal management com-
panies.’’. 
(4) APPRAISAL MANAGEMENT COMPANY DEFI-
NITION.—Section 1121 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 3350) is amended by adding at the end 
the following: 
‘‘(11) APPRAISAL
MANAGEMENT
COMPANY.— 
The term ‘appraisal management company’ means, 
in connection with valuing properties collateralizing 
mortgage loans or mortgages incorporated into a 
securitization, any external third party authorized ei-
ther by a creditor of a consumer credit transaction 
secured by a consumer’s principal dwelling or by an 
underwriter of or other principal in the secondary 
mortgage markets, that oversees a network or panel 
of more than 15 certified or licensed appraisers in 
a State or 25 or more nationally within a given 
year— 
‘‘(A) to recruit, select, and retain apprais-
ers;
1642 
‘‘(B) to contract with licensed and certified 
appraisers to perform appraisal assignments; 
‘‘(C) to manage the process of having an 
appraisal performed, including providing admin-
istrative duties such as receiving appraisal or-
ders and appraisal reports, submitting com-
pleted appraisal reports to creditors and under-
writers, collecting fees from creditors and un-
derwriters for services provided, and reimburs-
ing appraisers for services performed; or 
‘‘(D) to review and verify the work of ap-
praisers.’’. 
(g) STATE AGENCY REPORTING REQUIREMENT.— 
Section 1109(a) of the Financial Institutions Reform, Re-
covery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)) 
is amended— 
(1) by striking ‘‘and’’ after the semicolon in 
paragraph (1); 
(2) by redesignating paragraph (2) as para-
graph (4); and 
(3) by inserting after paragraph (1) the fol-
lowing new paragraphs: 
‘‘(2) transmit reports on sanctions, disciplinary 
actions, license and certification revocations, and li-
cense and certification suspensions on a timely basis
1643 
to the national registry of the Appraisal Sub-
committee; 
‘‘(3) transmit reports on a timely basis of su-
pervisory activities involving appraisal management 
companies or other third-party providers of apprais-
als and appraisal management services, including in-
vestigations initiated and disciplinary actions taken; 
and’’. 
(h) REGISTRY FEES MODIFIED.— 
(1) IN GENERAL.—Section 1109(a) of the Fi-
nancial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3338(a)) is amend-
ed— 
(A) by amending paragraph (4) (as modi-
fied by section 9503(g)) to read as follows: 
‘‘(4) collect— 
‘‘(A) from such individuals who perform or 
seek to perform appraisals in federally related 
transactions, an annual registry fee of not more 
than $40, such fees to be transmitted by the 
State agencies to the Council on an annual 
basis; and 
‘‘(B) from an appraisal management com-
pany that either has registered with a State ap-
praiser certifying and licensing agency in ac-
1644 
cordance with this title or operates as a sub-
sidiary of a federally regulated financial institu-
tion, an annual registry fee of— 
‘‘(i) in the case of such a company 
that has been in existence for more than a 
year, $25 multiplied by the number of ap-
praisers working for or contracting with 
such company in such State during the 
previous year, but where such $25 amount 
may be adjusted, up to a maximum of $50, 
at the discretion of the Appraisal Sub-
committee, if necessary to carry out the 
Subcommittee’s functions under this title; 
and 
‘‘(ii) in the case of such a company 
that has not been in existence for more 
than a year, $25 multiplied by an appro-
priate number to be determined by the Ap-
praisal Subcommittee, and where such 
number will be used for determining the 
fee of all such companies that were not in 
existence for more than a year, but where 
such $25 amount may be adjusted, up to 
a maximum of $50, at the discretion of the 
Appraisal Subcommittee, if necessary to
1645 
carry out the Subcommittee’s functions 
under this title.’’; and 
(B) by amending the matter following 
paragraph (4), as redesignated, to read as fol-
lows: 
‘‘Subject to the approval of the Council, the Appraisal 
Subcommittee may adjust the dollar amount of registry 
fees under paragraph (4)(A), up to a maximum of $80 
per annum, as necessary to carry out its functions under 
this title. The Appraisal Subcommittee shall consider at 
least once every 5 years whether to adjust the dollar 
amount of the registry fees to account for inflation. In 
implementing any change in registry fees, the Appraisal 
Subcommittee shall provide flexibility to the States for 
multi-year certifications and licenses already in place, as 
well as a transition period to implement the changes in 
registry fees. In establishing the amount of the annual 
registry fee for an appraisal management company, the 
Appraisal Subcommittee shall have the discretion to im-
pose a minimum annual registry fee for an appraisal man-
agement company to protect against the under reporting 
of the number of appraisers working for or contracted by 
the appraisal management company.’’. 
(2) 
INCREMENTAL
REVENUES.—Incremental 
revenues collected pursuant to the increases required
1646 
by this subsection shall be placed in a separate ac-
count at the United States Treasury, entitled the 
‘‘Appraisal Subcommittee Account’’. 
(i) GRANTS AND REPORTS.—Section 1109(b) of the 
Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3348(b)) is amended— 
(1) by striking ‘‘and’’ after the semicolon in 
paragraph (3); 
(2) by striking the period at the end of para-
graph (4) and inserting a semicolon; 
(3) by adding at the end the following new 
paragraphs: 
‘‘(5) to make grants to State appraiser certi-
fying and licensing agencies to support the efforts of 
such agencies to comply with this title, including— 
‘‘(A) the complaint process, complaint in-
vestigations, and appraiser enforcement activi-
ties of such agencies; and 
‘‘(B) the submission of data on State li-
censed and certified appraisers and appraisal 
management companies to the National ap-
praisal registry, including information affirming 
that the appraiser or appraisal management 
company meets the required qualification cri-
1647 
teria and formal and informal disciplinary ac-
tions; and 
‘‘(6) to report to all State appraiser certifying 
and licensing agencies when a license or certification 
is surrendered, revoked, or suspended.’’. 
Obligations authorized under this subsection may not ex-
ceed 75 percent of the fiscal year total of incremental in-
crease in fees collected and deposited in the ‘‘Appraisal 
Subcommittee Account’’ pursuant to subsection (h). 
(j) CRITERIA.—Section 1116 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3345) is amended— 
(1) in subsection (c), by inserting ‘‘whose cri-
teria for the licensing of a real estate appraiser cur-
rently meet or exceed the minimum criteria issued 
by the Appraisal Qualifications Board of The Ap-
praisal Foundation for the licensing of real estate 
appraisers’’ before the period at the end; and 
(2) by striking subsection (e) and inserting the 
following new subsection: 
‘‘(e) MINIMUM QUALIFICATION REQUIREMENTS.— 
Any requirements established for individuals in the posi-
tion of ‘Trainee Appraiser’ and ‘Supervisory Appraiser’ 
shall meet or exceed the minimum qualification require-
ments of the Appraiser Qualifications Board of The Ap-
1648 
praisal Foundation. The Appraisal Subcommittee shall 
have the authority to enforce these requirements.’’. 
(k) MONITORING OF STATE APPRAISER CERTIFYING 
AND LICENSING AGENCIES.—Section 1118 of the Finan-
cial Institutions Reform, Recovery, and Enforcement Act 
of 1989 (12 U.S.C. 3347) is amended— 
(1) by amending subsection (a) to read as fol-
lows: 
‘‘(a) IN GENERAL.—The Appraisal Subcommittee 
shall monitor each State appraiser certifying and licensing 
agency for the purposes of determining whether such 
agency— 
‘‘(1) has policies, practices, funding, staffing, 
and procedures that are consistent with this title; 
‘‘(2) processes complaints and completes inves-
tigations in a reasonable time period; 
‘‘(3) appropriately disciplines sanctioned ap-
praisers and appraisal management companies; 
‘‘(4) maintains an effective regulatory program; 
and 
‘‘(5) reports complaints and disciplinary actions 
on a timely basis to the national registries on ap-
praisers and appraisal management companies main-
tained by the Appraisal Subcommittee.
1649 
The Appraisal Subcommittee shall have the authority to 
remove a State licensed or certified appraiser or a reg-
istered appraisal management company from a national 
registry on an interim basis pending State agency action 
on licensing, certification, registration, and disciplinary 
proceedings. The Appraisal Subcommittee and all agen-
cies, instrumentalities, and Federally recognized entities 
under this title shall not recognize appraiser certifications 
and licenses from States whose appraisal policies, prac-
tices, funding, staffing, or procedures are found to be in-
consistent with this title. The Appraisal Subcommittee 
shall have the authority to impose sanctions, as described 
in this section, against a State agency that fails to have 
an effective appraiser regulatory program. In determining 
whether such a program is effective, the Appraisal Sub-
committee shall include an analyses of the licensing and 
certification of appraisers, the registration of appraisal 
management companies, the issuance of temporary li-
censes and certifications for appraisers, the receiving and 
tracking of submitted complaints against appraisers and 
appraisal management companies, the investigation of 
complaints, and enforcement actions against appraisers 
and appraisal management companies. The Appraisal 
Subcommittee shall have the authority to impose interim 
actions and suspensions against a State agency as an al-
1650 
ternative to, or in advance of, the derecognition of a State 
agency.’’. 
(2) in subsection (b)(2), by inserting after ‘‘au-
thority’’ the following: ‘‘or sufficient funding’’. 
(l) RECIPROCITY.—Subsection (b) of section 1122 of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3351(b)) is amended to read 
as follows: 
‘‘(b) RECIPROCITY.—A State appraiser certifying or 
licensing agency shall issue a reciprocal certification or li-
cense for an individual from another State when— 
‘‘(1) the appraiser licensing and certification 
program of such other State is in compliance with 
the provisions of this title; and 
‘‘(2) the appraiser holds a valid certification 
from a State whose requirements for certification or 
licensing meet or exceed the licensure standards es-
tablished by the State where an individual seeks ap-
praisal licensure.’’. 
(m) CONSIDERATION OF PROFESSIONAL APPRAISAL 
DESIGNATIONS.—Section 1122(d) of the Financial Insti-
tutions Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 3351(d)) is amended by striking ‘‘shall not ex-
clude’’ and all that follows through the end of the sub-
section and inserting the following: ‘‘may include edu-
1651 
cation achieved, experience, sample appraisals, and ref-
erences from prior clients. Membership in a nationally rec-
ognized professional appraisal organization may be a cri-
teria considered, though lack of membership therein shall 
not be the sole bar against consideration for an assign-
ment under these criteria.’’. 
(n) APPRAISER INDEPENDENCE.—Section 1122 of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3351) is amended by adding 
at the end the following new subsection: 
‘‘(g) APPRAISER INDEPENDENCE MONITORING.— 
The Appraisal Subcommittee shall monitor each State ap-
praiser certifying and licensing agency for the purpose of 
determining whether such agency’s policies, practices, and 
procedures are consistent with the purposes of maintain-
ing appraiser independence and whether such State has 
adopted and maintains effective laws, regulations, and 
policies aimed at maintaining appraiser independence.’’. 
(o) APPRAISER EDUCATION.—Section 1122 of the 
Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3351) is amended by insert-
ing after subsection (g) (as added by subsection (l) of this 
section) the following new subsection: 
‘‘(h) APPROVED EDUCATION.—The Appraisal Sub-
committee shall encourage the States to accept courses ap-
1652 
proved by the Appraiser Qualification Board’s Course Ap-
proval Program.’’. 
(p) APPRAISAL COMPLAINT HOTLINE.—Section 1122 
of the Financial Institutions Reform, Recovery, and En-
forcement Act of 1989 (12 U.S.C. 3351), as amended by 
this section, is further amended by adding at the end the 
following new subsection: 
‘‘(i) APPRAISAL COMPLAINT NATIONAL HOTLINE.— 
If, 1 year after the date of the enactment of this sub-
section, the Appraisal Subcommittee determines that no 
national hotline exists to receive complaints of non-compli-
ance with appraisal independence standards and Uniform 
Standards of Professional Appraisal Practice, including 
complaints from appraisers, individuals, or other entities 
concerning the improper influencing or attempted im-
proper influencing of appraisers or the appraisal process, 
the Appraisal Subcommittee shall establish and operate 
such a national hotline, which shall include a toll-free tele-
phone number and an email address. If the Appraisal Sub-
committee operates such a national hotline, the Appraisal 
Subcommittee shall refer complaints for further action to 
appropriate governmental bodies, including a State ap-
praiser certifying and licensing agency, a financial institu-
tion regulator, or other appropriate legal authorities. For 
complaints referred to State appraiser certifying and li-
1653 
censing agencies or to Federal regulators, the Appraisal 
Subcommittee shall have the authority to follow up such 
complaint referrals in order to determine the status of the 
resolution of the complaint.’’. 
(q) AUTOMATED VALUATION MODELS.—Title XI of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3331 et seq.), as amended 
by this section, is further amended by adding at the end 
the following new section (and amending the table of con-
tents accordingly): 
‘‘SEC. 1125. AUTOMATED VALUATION MODELS USED TO 
VALUE CERTAIN MORTGAGES. 
‘‘(a) IN GENERAL.—Automated valuation models 
shall adhere to quality control standards designed to— 
‘‘(1) ensure a high level of confidence in the es-
timates produced by automated valuation models; 
‘‘(2) protect against the manipulation of data; 
‘‘(3) seek to avoid conflicts of interest; and 
‘‘(4) require random sample testing and re-
views, where such testing and reviews are performed 
by an appraiser who is licensed or certified in the 
State where the testing and reviews take place. 
‘‘(b) ADOPTION OF REGULATIONS.—The Appraisal 
Subcommittee and its member agencies, in consultation 
with the Appraisal Standards Board of the Appraisal
1654 
Foundation and other interested parties, shall promulgate 
regulations to implement the quality control standards re-
quired under this section. 
‘‘(c) ENFORCEMENT.—Compliance with regulations 
issued under this subsection shall be enforced by— 
‘‘(1) with respect to a financial institution, or 
subsidiary owned and controlled by a financial insti-
tution and regulated by a Federal financial institu-
tion regulatory agency, the Federal financial institu-
tion regulatory agency that acts as the primary Fed-
eral supervisor of such financial institution or sub-
sidiary; and 
‘‘(2) with respect to other persons, the Ap-
praisal Subcommittee. 
‘‘(d) AUTOMATED VALUATION MODEL DEFINED.— 
For purposes of this section, the term ‘automated valu-
ation model’ means any computerized model used by mort-
gage originators and secondary market issuers to deter-
mine the collateral worth of a mortgage secured by a con-
sumer’s principal dwelling.’’. 
(r) BROKER PRICE OPINIONS.—Title XI of the Fi-
nancial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3331 et seq.), as amended by this 
section, is further amended by adding at the end the fol-
1655 
lowing new section (and amending the table of contents 
accordingly): 
‘‘SEC. 1126. BROKER PRICE OPINIONS. 
‘‘(a) GENERAL PROHIBITION.—In conjunction with 
the purchase of a consumer’s principal dwelling, broker 
price opinions may not be used as the primary basis to 
determine the value of a piece of property for the purpose 
of a loan origination of a residential mortgage loan se-
cured by such piece of property. 
‘‘(b) BROKER PRICE OPINION DEFINED.—For pur-
poses of this section, the term ‘broker price opinion’ means 
an estimate prepared by a real estate broker, agent, or 
sales person that details the probable selling price of a 
particular piece of real estate property and provides a 
varying level of detail about the property’s condition, mar-
ket, and neighborhood, and information on comparable 
sales, but does not include an automated valuation model, 
as defined in section 1125(c).’’. 
(s) AMENDMENTS TO APPRAISAL SUBCOMMITTEE.— 
Section 1011 of the Federal Financial Institutions Exam-
ination Council Act of 1978 (12 U.S.C. 3310) is amend-
ed— 
(1) in the first sentence, by adding before the 
period the following: ‘‘and the Federal Housing Fi-
nance Agency’’; and
1656 
(2) by inserting at the end the following: ‘‘At 
all times at least one member of the Appraisal Sub-
committee shall have demonstrated knowledge and 
competence through licensure, certification, or pro-
fessional designation within the appraisal profes-
sion.’’. 
(t) TECHNICAL CORRECTIONS.— 
(1) Section 1119(a)(2) of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3348(a)(2)) is amended by striking 
‘‘council,’’ and inserting ‘‘Council,’’. 
(2) Section 1121(6) of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3350(6)) is amended by striking 
‘‘Corporations,’’ and inserting ‘‘Corporation,’’. 
(3) Section 1121(8) of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3350(8)) is amended by striking 
‘‘council’’ and inserting ‘‘Council’’. 
(4) Section 1122 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 3351) is amended— 
(A) in subsection (a)(1) by moving the left 
margin of subparagraphs (A), (B), and (C) 2 
ems to the right; and
1657 
(B) in subsection (c)— 
(i) by striking ‘‘Federal Financial In-
stitutions Examination Council’’ and in-
serting ‘‘Financial Institutions Examina-
tion Council’’; and 
(ii) by striking ‘‘the council’s func-
tions’’ and inserting ‘‘the Council’s func-
tions’’. 
SEC. 9504. STUDY REQUIRED ON IMPROVEMENTS IN AP-
PRAISAL PROCESS AND COMPLIANCE PRO-
GRAMS. 
(a) STUDY.—The Comptroller General shall conduct 
a comprehensive study on possible improvements in the 
appraisal process generally, and specifically on the consist-
ency in and the effectiveness of, and possible improve-
ments in, State compliance efforts and programs in ac-
cordance with title XI of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989. In addi-
tion, this study shall examine the existing exemptions to 
the use of certified appraisers issued by Federal financial 
institutions regulatory agencies. The study shall also re-
view the threshold level established by Federal regulators 
for compliance under title XI and whether there is a need 
to revise them to reflect the addition of consumer protec-
tion to the purposes and functions of the Appraisal Sub-
1658 
committee. The study shall additionally examine the qual-
ity of different types of mortgage collateral valuations pro-
duced by broker price opinions, automated valuation mod-
els, licensed appraisals, and certified appraisals, among 
others, and the quality of appraisals provided through dif-
ferent distribution channels, including appraisal manage-
ment companies, independent appraisal operations within 
a mortgage originator, and fee-for-service appraisals. The 
study shall also include an analysis and statistical break-
down of enforcement actions taken during the last 10 
years against different types of appraisers, including cer-
tified, licensed, supervisory, and trainee appraisers. Fur-
thermore, the study shall examine the benefits and costs, 
as well as the advantages and disadvantages, of estab-
lishing a national repository to collect data related to real 
estate property collateral valuations performed in the 
United States. 
(b) REPORT.—Before the end of the 18-month period 
beginning on the date of the enactment of this Act, the 
Comptroller General shall submit a report on the study 
under subsection (a) to the Committee on Financial Serv-
ices of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate, 
together with such recommendations for administrative or
1659 
legislative action, at the Federal or State level, as the 
Comptroller General may determine to be appropriate. 
(c) ADDITIONAL STUDY REQUIRED.—The Comp-
troller General shall conduct an additional study to deter-
mine the effects that the changes to the seller-guide ap-
praisal requirements of Fannie Mae and Freddie Mac con-
tained in the Home Valuation Code of Conduct have on 
small business, like mortgage brokers and independent ap-
praisers, and consumers, including the effect on the— 
(1) quality and costs of appraisals; 
(2) length of time for obtaining appraisals; 
(3) impact on consumer protection, especially 
regarding maintaining appraisal independence, abat-
ing appraisal inflation, and mitigating acts of ap-
praisal fraud; 
(4) structure of the appraisal industry, espe-
cially regarding appraisal management companies, 
fee-for-service appraisers, and the regulation of ap-
praisal management companies by the states; and 
(5) impact on mortgage brokers and other small 
business professionals in the financial services indus-
try. 
(d) ADDITIONAL REPORT.—Before the end of the 6- 
month period beginning on the date of the enactment of 
this Act, the Comptroller General shall submit an addi-
1660 
tional report to the Committee on Financial Services of 
the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate con-
taining the findings and conclusions of the Comptroller 
General with respect to the study conducted pursuant to 
subsection (c). Such additional report shall take into con-
sideration the Small Business Administration’s views on 
how small businesses are affected by the Home Valuation 
Code of Conduct. 
SEC. 9505. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT. 
Subsection (e) of section 701 of the Equal Credit Op-
portunity Act (15 U.S.C. 1691) is amended to read as 
follows: 
‘‘(e) COPIES FURNISHED TO APPLICANTS.— 
‘‘(1) IN GENERAL.—Each creditor shall furnish 
to an applicant a copy of any and all written ap-
praisals and valuations developed in connection with 
the applicant’s application for a loan that is secured 
or would have been secured by a first lien on a 
dwelling promptly upon completion, but in no case 
later than 3 days prior to the closing of the loan, 
whether the creditor grants or denies the applicant’s 
request for credit or the application is incomplete or 
withdrawn.
1661 
‘‘(2) WAIVER.—The applicant may waive the 3 
day requirement provided for in paragraph (1), ex-
cept where otherwise required in law. 
‘‘(3) REIMBURSEMENT.—The applicant may be 
required to pay a reasonable fee to reimburse the 
creditor for the cost of the appraisal, except where 
otherwise required in law. 
‘‘(4) FREE COPY.—Notwithstanding paragraph 
(3), the creditor shall provide a copy of each written 
appraisal or valuation at no additional cost to the 
applicant. 
‘‘(5) NOTIFICATION
TO
APPLICANTS.—At the 
time of application, the creditor shall notify an ap-
plicant in writing of the right to receive a copy of 
each written appraisal and valuation under this sub-
section. 
‘‘(6) REGULATIONS.—The Board shall prescribe 
regulations to implement this subsection within 1 
year of the date of the enactment of this subsection. 
‘‘(7) VALUATION
DEFINED.—For purposes of 
this subsection, the term ‘valuation’ shall include 
any estimate of the value of a dwelling developed in 
connection with a creditor’s decision to provide cred-
it, including those values developed pursuant to a 
policy of a government sponsored enterprise or by an