A recent Government Accountability Office report on appraisal oversight adds to evidence valuation problems could be persisting, according the National Association of Home Builders. The report suggests that the Appraisal Subcommittee charged with monitoring valuations has not fully been able to yet in line with its expanded role under Dodd-Frank.
A call to the subcommittee's executive director had not been returned at press time. The GAO said the subcommittee and two of the seven agencies it provided a draft of the report to agreed with its recommendations. One agency did not comment and the remainder did not respond in writing, according to the GAO.
A summary of the report on the role of the subcommittee originally formed under 1989's Financial Institutions Reform, Recovery and Enforcement Act indicates it has lacked sufficient funding and staff as well as a set of defined criteria, policies and procedures for its expanded oversight.
“ASC has not reported or clearly defined the criteria it uses to assess states' overall compliance levels,” said the GAO, in the report.
While charged with monitoring the appraisal requirements of the federal financial institutions regulators, the subcommittee “has not defined the scope of this function—for example, by developing policies and procedures—and its monitoring activities have been limited,” according to the GAO.
“ASC faces potential resource and planning challenges in implementing some Dodd-Frank Act provisions,” the GAO report added. “ASC has only 10 staff and is funded by appraiser registration fees that totaled $2.8 million in fiscal year 2010.”
While the Dodd-Frank Act in expanding the subcommittee's role among other things requires it “to establish a national appraiser complaint hotline and provide grants to state appraiser regulatory agencies,” it had not yet as of last fall, for example, set up the hotline or implemented a grant program.
“As of October 2011, ASC had completed several implementation tasks that required no rulemaking or creation of new programs and was in various stages of progress on the others,” the GAO report said. “The potentially resource-intensive nature of some remaining tasks will require careful planning. For example, operating a complaint hotline may require investments in information technology and the creation of screening and follow-up procedures. Also, implementing a grant program will require ASC to set aside funds, develop funding criteria, and oversee grantees.”
However the subcommittee has been “in the process of developing a strategic plan to help carry out these efforts with available resources,” the GAO found.
