Feds Press for Appraisal Standards Exemption

Federal banking regulators are pressing the Office of Federal Housing Enterprise Oversight to exempt federally regulated institutions from proposed appraisal standards Fannie Mae and Freddie Mac agreed to implement under a settlement with New York Attorney General Andrew Cuomo. The appraisal standards or code would "materially disrupt mortgage lending processes and raise costs," according to a joint letter signed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the National Credit Union Administration. Comptroller of the Currency John Dugan previously urged OFHEO Director James Lockhart to withdraw the appraisal code, which would ban the use of in-house or affiliated appraisers on loans sold to the two government-sponsored enterprises. "If not withdrawn, the agreements and code should be revised to exempt federally regulated lenders," the June 19 letter says. Meanwhile, the Senate is likely to vote on an amendment to a major housing bill this week that directs OFHEO to issue regulations that establish appraisal standards for Fannie and Freddie. The appraisal amendment by Sen. Elizabeth Dole, R-N.C., would nullify the appraisal code the GSEs worked out with the New York AG. Senate Banking Committee Chairman Christopher J. Dodd, D- Conn., opposes the Dole amendment.