Real Estate Valuation Regulations

The real estate appraisal industry is subject to federal and state regulations.  In an effort to keep up with the regulations and provide a centralized source, we provide this resource.

The Treasury Department publishes the Federal Register.  What is important for the appraisal industry are the new Appraisal Management Regulations and in particular the “Customary and Reasonable Fee” discussion.

The Uniform Standard of Professional Appraisal Practice, 2010USPAP is the Bible that all licensed appraisers must adhere to.  The USPAP Vision Statement is “The Appraisal Foundation will be the organization that is the ultimate source of appraisal standards, appraiser qualifications and standards of ethical conduct in all valuation disciplines to assure public trust in the valuation profession.”

The Home Valuation Code of Conduct, hvcc was the brainchild of Andrew Cuomo, the former HUD Secretary, Attorney General of New York and now Governor of New York.  Sold to the public as a way to improve appraiser independence it actually provided a means whereby the largest banks and title companies could create an oligopoly by essentially outlawing the established business practices of tens of thousands of small appraisal firms across the country.

Dodd-Frank Financial Reform Bill H.R. 4173.  This is a very wide ranging bill.  For the appraisal industry in completely re-wrote the landmark FIRREA legislation of 1989.  Its disruption of the industry is hard to overemphasize and codified the ideas of the HVCC.

Title XI is the portion of FIRREA that deals with the appraisal industry.  This is the re-write of Title XI from Dodd-Frank.  Notice everything in red.

HUD establishes basic standards that a home must meet to qualify for a FHA mortgage.  Here are the new rules that appraisers follow.  FHA New Appraisal Reporting Requirements

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