It has been a while since I could find the time to sit down and write another newsletter.

Recently there has been much progress toward enacting new legislation on the subject of predatory lending… hopefully recent legislation elsewhere will lead to changes here in Arkansas in 2009.

Freddie Mac, the NY Attorney General, and the Office of Federal Housing Enterprise Oversight (OFHEO) have implemented the Home Valuation Code of Conduct, to enhance independence of Appraisers/Appraisal Process.  The goal is to make the lending process more independent, by prohibiting in-house appraisals for re-sales to FHLMC, prohibiting appraisals from affiliates of lenders, prohibiting appraisals obtained thru a lenders appraisal management company, requiring that borrowers get a copy of their appraisal 3 days prior to closing, requiring that the lender be responsible for providing payment of all compensation to the appraiser, requiring absolute independence within the lender’s organization for payment and selection of the appraisal assignment, and requiring that lenders perform quality control on 10% of the appraisals received and report the results to the Independent Valuation Protection Institute.

Is this a total solution to the problems facing appraisers, “NO”, but it may be a start…we need to watch and try and implement something similar here in Arkansas, if the results in New York are favorable.

Given the present political climate, I expect that we will see more of this type legislation on both the Federal and State level later this year.

Thru your annual dues, we have just about sufficient funds on hand to hire a lobbyist to watch out for our position during the next session of the Arkansas Legislature.

Another hot topic around the Country is the question of whether or not it is a good idea for State Licensing Boards to keep accepting “anonymous” complaints against appraisers.  I would like your input on this matter, just to be able to gauge the memberships feeling on this topic.  Some states are proposing doing away with the practice of prosecuting appraisers without them having the benefit of facing their accuser… at least one state is considering accepting anonymous complaints, when they have not done so over the past 16 years, so the problem has folks with pro and con opinions, and I would like to hear your thoughts about this matter.

Tom M. Ferstl, MAI, SRA