176 
‘‘(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 
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 501(c)) the following new item: 
‘‘129E. Unfair and deceptive practices and acts relating to certain consumer 
credit transactions.’’. 
SEC. 603. 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
177 
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— 
(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
178 
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 
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
179 
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 
(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’’;
180 
(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: 
‘‘(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—
181 
(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 
‘‘(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
182 
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— 
‘‘(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.
183 
‘‘(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; 
‘‘(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
184 
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 
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.
185 
‘‘(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 
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,
186 
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; 
‘‘(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.’’.
187 
(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 
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-
188 
ment Act of 1989 (12 U.S.C. 3338(a)) is amend-
ed— 
(A) by amending paragraph (4) (as modi-
fied by section 603(g) of this Act) 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-
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,
189 
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 
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
190 
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 
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;
191 
(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-
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).’’.
192 
(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-
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:
193 
‘‘(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. 
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-
194 
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-
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:
195 
‘‘(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-
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-
196 
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-
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:
197 
‘‘(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-
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
198 
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 
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-
199 
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-
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
200 
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 
(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.—
201 
(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 
(B) in subsection (c)— 
(i) by striking ‘‘Federal Financial In-
stitutions Examination Council’’ and in-
serting ‘‘Financial Institutions Examina-
tion Council’’; and
202 
(ii) by striking ‘‘the council’s func-
tions’’ and inserting ‘‘the Council’s func-
tions’’. 
SEC. 604. 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-
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-
203 
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 
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-
204 
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-
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-
205 
sideration the Small Business Administration’s views on 
how small businesses are affected by the Home Valuation 
Code of Conduct. 
SEC. 605. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT. 
Subsection (e) of section 701 of the Equal Credit Op-
portunity Act ( U.S.C. 1691) is amended to read as fol-
lows: 
‘‘(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. 
‘‘(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.
206 
‘‘(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 
automated valuation model, a broker price opinion, 
or other methodology or mechanism.’’.
207 
SEC. 606. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 
1974 AMENDMENT RELATING TO CERTAIN AP-
PRAISAL FEES. 
Section 4 of the Real Estate Settlement Procedures 
Act of 1974 is amended by adding at the end the following 
new subsection: 
‘‘(c) The standard form described in subsection (a) 
shall include, in the case of an appraisal coordinated by 
an appraisal management company (as such term is de-
fined in section 1121(11) of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3350(11))), a clear disclosure of— 
‘‘(1) the fee paid directly to the appraiser by 
such company; and 
‘‘(2) the administration fee charged by such 
company.’’.
208 
TITLE VII—SENSE OF CONGRESS 
REGARDING 
THE 
IMPOR-
TANCE 
OF 
GOVERNMENT 
SPONSORED 
ENTERPRISES 
REFORM 
SEC. 701. SENSE OF CONGRESS REGARDING THE IMPOR-
TANCE OF GOVERNMENT-SPONSORED EN-
TERPRISES REFORM TO ENHANCE THE PRO-
TECTION, LIMITATION, AND REGULATION OF 
THE TERMS OF RESIDENTIAL MORTGAGE 
CREDIT. 
(a) FINDINGS.—The Congress finds as follows: 
(1) The Government-sponsored enterprises, 
Federal National Mortgage Association (Fannie 
Mae) and the Federal Home Loan Mortgage Cor-
poration (Freddie Mac), were chartered by Congress 
to ensure a reliable and affordable supply of mort-
gage funding, but enjoy a dual legal status as pri-
vately owned corporations with Government man-
dated affordable housing goals. 
(2) In 1996, the Department of Housing and 
Urban Development required that 42 percent of 
Fannie Mae’s and Freddie Mac’s mortgage financing 
should go to borrowers with income levels below the 
median for a given area.
209 
(3) In 2004, the Department of Housing and 
Urban Development revised those goals, increasing 
them to 56 percent of their overall mortgage pur-
chases by 2008, and additionally mandated that 12 
percent of all mortgage purchases by Fannie Mae 
and Freddie Mac be ‘‘special affordable’’ loans made 
to borrowers with incomes less than 60 percent of an 
area’s median income, a target that ultimately in-
creased to 28 percent for 2008. 
(4) To help fulfill those mandated affordable 
housing goals, in 1995 the Department of Housing 
and Urban Development authorized Fannie Mae and 
Freddie Mac to purchase subprime securities that 
included loans made to low-income borrowers. 
(5) After this authorization to purchase 
subprime securities, subprime and near-prime loans 
increased from 9 percent of securitized mortgages in 
2001 to 40 percent in 2006, while the market share 
of conventional mortgages dropped from 78.8 per-
cent in 2003 to 50.1 percent by 2007 with a cor-
responding increase in subprime and Alt-A loans 
from 10.1 percent to 32.7 percent over the same pe-
riod. 
(6) In 2004 alone, Fannie Mae and Freddie 
Mac purchased $175,000,000,000 in subprime mort-
210 
gage securities, which accounted for 44 percent of 
the market that year, and from 2005 through 2007, 
Fannie Mae and Freddie Mac purchased approxi-
mately $1,000,000,000,000 in subprime and Alt-A 
loans, while Fannie Mae’s acquisitions of mortgages 
with less than 10 percent down payments almost tri-
pled. 
(7) According to data from the Federal Hous-
ing Finance Agency (FHFA) for the fourth quarter 
of 2008, Fannie Mae and Freddie Mac own or guar-
antee 75 percent of all newly originated mortgages, 
and Fannie Mae and Freddie Mac currently own 
13.3 percent of outstanding mortgage debt in the 
United States and have issued mortgage-backed se-
curities for 31.0 percent of the residential debt mar-
ket, a combined total of 44.3 percent of outstanding 
mortgage debt in the United States. 
(8) On September 7, 2008, the FHFA placed 
Fannie Mae and Freddie Mac into conservatorship, 
with the Treasury Department subsequently agree-
ing to purchase at least $200,000,000,000 of pre-
ferred stock from each enterprise in exchange for 
warrants for the purchase of 79.9 percent of each 
enterprise’s common stock.
211 
(9) The conservatorship for Fannie Mae and 
Freddie Mac has potentially exposed taxpayers to 
upwards of $5,300,000,000,000 worth of risk. 
(10) The hybrid public-private status of Fannie 
Mae and Freddie Mac is untenable and must be re-
solved to assure that consumers are offered and re-
ceive residential mortgage loans on terms that rea-
sonably reflect their ability to repay the loans and 
that are understandable and not unfair, deceptive, or 
abusive. 
(b) SENSE OF THE CONGRESS.—It is the sense of 
the Congress that efforts to enhance by the protection, 
limitation, and regulation of the terms of residential mort-
gage credit and the practices related to such credit would 
be incomplete without enactment of meaningful structural 
reforms of Fannie Mae and Freddie Mac. 
TITLE VIII—REPORTS 
SEC. 801. GAO STUDY REPORT ON GOVERNMENT EFFORTS 
TO COMBAT MORTGAGE FORECLOSURE RES-
CUE 
SCAMS 
AND 
LOAN 
MODIFICATION 
FRAUD. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study of the current inter-agency 
efforts of the Secretary of the Treasury, the Secretary of 
Housing and Urban Development, the Attorney General,
212 
and the Federal Trade Commission to crackdown on mort-
gage foreclosure rescue scams and loan modification fraud 
in order to advise the Congress to the risks and 
vulnerabilities of emerging schemes in the loan modifica-
tion arena. 
(b) REPORT.— 
(1) IN
GENERAL.—The Comptroller General 
shall submit a report to the Congress on the study 
conducted under subsection (a) containing such rec-
ommendations for legislative and administrative ac-
tions as the Comptroller General may determine to 
be appropriate in addition to the recommendations 
required under paragraph (2). 
(2) SPECIFIC TOPICS.—The report made under 
paragraph (1) shall include— 
(A) an evaluation of the effectiveness of 
the inter-agency task force current efforts to 
combat mortgage foreclosure rescue scams and 
loan modification fraud scams; 
(B) specific recommendations on agency or 
legislative action that are essential to properly 
protect homeowners from mortgage foreclosure 
rescue scams and loan modification fraud 
scams; and
213 
(C) the adequacy of financial resources 
that the Federal Government is allocating to— 
(i) crackdown on loan modification 
and foreclosure rescue scams; and 
(ii) the education of homeowners 
about fraudulent scams relating to loan 
modification and foreclosure rescues. 
TITLE IX—MULTIFAMILY 
MORTGAGE RESOLUTION 
SEC. 901. MULTIFAMILY MORTGAGE RESOLUTION PRO-
GRAM. 
(a) ESTABLISHMENT.—Subject to subsection (e), the 
Secretary of the Treasury, in consultation with the Sec-
retary of Housing and Urban Development, shall develop 
a program to stabilize multifamily properties which are de-
linquent, at risk of default or disinvestment, or in fore-
closure. 
(b) FOCUS OF PROGRAM.—The program developed 
under this section shall be used to ensure the protection 
of current and future tenants of at risk multifamily prop-
erties, where feasible, by— 
(1) creating sustainable financing of such prop-
erties that is based on— 
(A) the current rental income generated by 
such properties; and
214 
(B) the preservation of adequate operating 
reserves; 
(2) maintaining the level of Federal, State, and 
city subsidies in effect as of the date of enactment 
of this Act; and 
(3) facilitating the transfer, when necessary, of 
such properties to responsible new owners. 
(c) COORDINATION.—The Secretary of the Treasury 
shall in carrying out the program developed under this sec-
tion coordinate with the Secretary of Housing and Urban 
Development, the Federal Deposit Insurance Corporation, 
the Board of Governors of the Federal Reserve System, 
the Federal Housing Finance Agency, and any other Fed-
eral Government agency that the Secretary considers ap-
propriate. 
(d) DEFINITION.—For purposes of this section, the 
term ‘‘multifamily properties’’ means a residential struc-
ture that consists of 5 or more dwelling units. 
(e) AUTHORITY.—This section shall not limit the 
ability of the Secretary of the Treasury to use any existing 
authority to carry out the program under this section.
215 
TITLE X—STUDY OF EFFECT OF 
DRYWALL 
PRESENCE 
ON 
FORECLOSURES 
SEC. 1001. STUDY OF EFFECT OF DRYWALL PRESENCE ON 
FORECLOSURES. 
(a) STUDY.—The Secretary of Housing and Urban 
Development, in consultation with the Secretary of the 
Treasury, shall conduct a study of the effect on residential 
mortgage loan foreclosures of— 
(1) the presence in residential structures sub-
ject to such mortgage loans of drywall that was im-
ported from China during the period beginning with 
2004 and ending at the end of 2007; and 
(2) the availability of property insurance for 
residential structures in which such drywall is 
present. 
(b) REPORT.—Not later than the expiration of the 
120-day period beginning on the date of the enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment shall submit to the Congress a report on the study 
conducted under subsection (a) containing its findings, 
conclusions, and recommendations.
216 
TITLE XI—FANNIE MAE GUIDE-
LINES 
FOR 
PURCHASE 
OF 
CONDOMINIUM AND COOPER-
ATIVE HOUSING MORTGAGES 
SEC. 1101. GUIDELINES FOR PURCHASE OF CONDOMINIUM 
AND COOPERATIVE HOUSING MORTGAGES. 
The Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation shall take ac-
tions as are appropriate to establish and revise fee sched-
ules, occupancy and pre-sale guidelines, and other relevant 
underwriting standards for the purchase of condominium 
and cooperative housing, consistent with appropriate levels 
of credit risk. In setting such fees, guidelines, and stand-
ards, each association may consider factors such as the 
relative health of the local or regional housing market in 
which such housing is located, and whether the housing 
is in a new or existing development. 
Passed the House of Representatives May 7, 2009. 
Attest: 
Clerk.
111TH CONGRESS 
1ST SESSION 
H. R. 1728 
AN ACT 
To amend the Truth in Lending Act to reform con-
sumer mortgage practices and provide account-
ability for such practices, to provide certain min-
imum standards for consumer mortgage loans, 
and for other purposes.