Congressional Hearing Provides Opportunity to Clarify Purpose

Appraisal Practices Board: A Free Resource for AppraisersCongressional Hearing Provides Opportunity to Clarify Purpose
FOR IMMEDIATE RELEASE June 29, 2012Contact:Paula Douglas SeidelExecutive AdministratorThe Appraisal [email protected] phone 202.624.3048 Washington, DC — The Appraisal Foundation (TAF), a non-profit education organization dedicated to professional valuation, testified yesterday before the U.S. House of Representatives, Committee on Financial Services, Subcommittee on Insurance, Housing and Community Opportunity. The hearing, entitled Appraisal Oversight: The Regulatory Impact on Consumers and Businesses, focused on the Appraiser Regulatory System in place today and whether there is need for modifications or improvement of this system. One issue discussed at the hearing was The Appraisal Foundation’s Appraisal Practices Board (APB), which was created by the Foundation in 2010. Testimony regarding the APB was quite varied. Providing testimony on behalf of the American Society of Appraisers (ASA) and the National Association of Independent Fee Appraisers (NAIFA), Karen Mann stated that, “We reject the view expressed by some that TAF has engaged in inappropriate ‘mission creep’ by establishing the Appraisal Practices Board (APB) and that the establishment of the APB infringes on the prerogatives of the professional appraisal organizations. The establishment of the APB for the purpose of drilling down on the meaning of certain USPAP provisions and addressing complex appraisal issues in the marketplace was widely requested; and, we believe serves important functions.” This view was not shared by Appraisal Institute President Sara Stephens, whose testimony regarding the APB stated that, “This is a dangerous and unjustified move that risks hamstringing and jeopardizing the real estate appraisal profession altogether. The regulatory burden for appraisers is on the cusp of being expanded exponentially." In his testimony, TAF President David Bunton told the Congressional Subcommittee that there is currently a great deal of misinformation circulating about the APB and that he wanted to take the opportunity to clarify, for the record, the APB’s purpose and mission. Specifically, he pointed out that: (1) The APB does not have any Congressional authority and adherence to the guidance is strictly voluntary; (2) The APB does not operate with any public/grant funds; (3) APB Valuation Advisories do not establish new valuation methods or techniques; rather, they are a compilation of existing valuation methods and techniques; and (4) APB Valuation Advisories are available to anyone at no cost. The genesis of the APB was the collapse of the housing market in 2008. For many appraisers this was the first time that they were confronted with declining prices, short sales and foreclosures. Because a majority of appraisers in the United States do not belong to any professional appraisal organization, the question became “Where do appraisers get guidance for their practice?” The Foundation established the APB to fill an existing void in the area of recognized valuation methods and techniques. This board offers voluntary guidance to appraisers, regulators and users of appraisal services on recognized valuation methods and techniques for all valuation disciplines. To reflect the needs of the marketplace, the APB annually solicits stakeholders to identify topics where additional guidance appears to be needed. Teams of experts are then selected to work with the APB in developing the appropriate guidance. This guidance is known as a Valuation Advisory and may include more than one recognized method or technique that addresses the specific issue. Valuation Advisories issued to date include: APB Valuation Advisory #1: Identification of Contributory Assets and Calculation of Economic RentsAPB Valuation Advisory #2: Adjusting Comparable Sales for Seller ConcessionsAPB Valuation Advisory #3: Residential Appraising in a Declining Market Valuation Advisories currently under development include: Identifying Comparable Properties Appraising Green Buildings – Background Competence The Valuation of Customer-Related Assets (Business Valuation)Control Premiums for Financial Reporting (Business Valuation) Contingent Consideration (Business Thanks!
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IT'S THE LAW- Statement 7: Prohibition Against Discrimination
State agencies should be aware that Title XI and the Agencies' regulations prohibit federally regulated financial institutions from excluding appraisers from consideration for an assignment by virtue of their membership, or lack of membership, in any appraisal organization. Federally regulated financial institutions should review the qualifications of appraisers to ensure that they are qualified for the assignment for which they are being considered. It is unacceptable to assume that an appraiser is qualified solely due to membership in, or designation from, an appraisal organization, or the lack thereof. The Agencies have determined that financial institutions' appraisal policies should not favor appraisers from one or more organizations or exclude individuals based on their lack of such membership. If a State agency learns that a certified or licensed appraiser allegedly has been a victim of such discrimination, the State agency should inform the Agency which has regulatory authority over the involved financial institution. INCLUDING THE APPRAISAL INSTITUTE-MAICONFIDENTIALITY/PRIVILEGE NOTICE: This transmission and any attachments are intended solely for the addressee. The information contained in this transmission is confidential in nature and protected from further use or disclosure under U.S. Pub. L. 106-102, 113 U.S. Stat. 1338 (1999), and may be subject to consultant/appraiser-client or other legal privilege. Your use or disclosure of this information for any purpose other than that intended by its transmittal is strictly prohibited and may subject you to fines and/or penalties under federal and state law. If you are not the intended recipient of this transmission, please destroy all copies received and confirm destruction to the sender via return transmittal