Industry organizations oppose the plan, say it will weaken protection
Homebuyers and mortgage lenders are better protected when a professional appraisal has taken place say industry organizations who oppose raising the threshold.
The American Society of Appraisers together with 5 other organizations have written to the government agencies considering the increase from $250,000 to $400,000.
They are urging the Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, to abandon their planned increase and have made several arguments to support that.
They say:
- The Agencies had recently considered the same increase in the residential threshold, and had decided against an increase "based on considerations of safety and soundness and consumer protection";
- In passing the Economic Growth, Regulatory Relief, and Consumer Protection Act, Congress declined to increase the threshold and instead provided discrete regulatory relief in rural areas;
- That many of the market conditions that existed during previous consideration of a threshold increase had changed in a way that does not support an increase today; and,
- Increasing the threshold such that over 7 in 10 Americans is denied the benefits of a Title XI appraisal harms consumer protection and safety and soundness.
"There is no question that homebuyers and lenders are best protected when they engage the services of a professional appraiser in connection with the single largest purchase most Americans will ever make,” said Robert Morrison, International President for ASA. “This proposal ignores that fact, and the agencies' own prior conclusions, just to give relief to a handful of lenders who do not value homebuyer or taxpayer protection."
The other organizations who have signed the letter are The Appraisal Institute, the American Society of Farm Managers and Rural Appraisers, MBREA | The Association for Valuation Professionals, the American Guild of Appraisers, OPEIU, AFL-CIO, and RICS.
