Appraisers Ask Feds to Require Appraisals on Modifications

Federal regulators should not allow banks to modify mortgages without requiring full and accurate appraisals, according to three appraisal groups that are raising "strong objections" to a proposed rewrite of bank appraisal guidelines. "Given the mortgage crisis we are experiencing and given the taxpayers' obligation to assume losses, it is astonishing that the bank regulatory agencies would continue to propose an exemption from their appraisal requirements of transactions involving mortgage loan modifications and workouts," according to the appraisers' comment letter. The American Society of Appraisers, American Society of Farm Managers and Rural Appraisers and National Association of Independent Fee Appraisers also object to other exemptions that allow banks to use automated valuation models and broker price opinions, instead of certified and licensed appraisers. "If the agencies truly believe that independent and reliable valuations are core to real estate decisions, it is difficult to understand why the guidelines permit such widespread use of valuation techniques which are often unreliable and, at best, only marginally reliable," the appraisers say.