On March 1, 2018, the United States Senate further considered pending Senate Bill 2155 “Economic Growth, Regulatory Relief, and Consumer Protection Act” sponsored by Sen. Mike Crapo of Indiana. The Bill has 25 cosponsors, including Sen. Thom Tillis of North Carolina. The Bill would provide a way for lenders in some rural areas to forgo an appraisal on a transaction if they are unable to find a licensed or certified appraiser.
The Bill seeks to amend Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) The pertinent text of the Bill reads (emphasis added)…
(b) Appraisal Not Required.—Except as provided in subsection (d), notwithstanding any other provision of law, an appraisal in connection with a federally related transaction involving real property or an interest in real property is not required if—
(1) the real property or interest in real property is located in a rural area, as described in section 1026.35(b)(2)(iv)(A) of title 12, Code of Federal Regulations;
(2) not later than 3 days after the date on which the Closing Disclosure Form, made in accordance with the final rule of the Bureau of Consumer Financial Protection entitled ‘Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)’ (78 Fed. Reg. 79730 (December 31, 2013)), relating to the federally related transaction is given to the consumer, the mortgage originator or its agent, directly or indirectly—
(A) has contacted not fewer than 3 State certified appraisers or State licensed appraisers, as applicable; and
(B) has documented that no State certified appraiser or State licensed appraiser, as applicable, was available within a reasonable amount of time, as determined by the Federal financial institutions regulatory agency with oversight of the mortgage originator, to perform the appraisal in connection with the federally related transaction;
(3) the transaction value is less than $400,000; and
(4) the mortgage originator is subject to oversight by a Federal financial institutions regulatory agency.
Along with the recent act by Appraiser Qualifications Board to reduce the minimum qualifications to become a certified appraiser (see our previous blog post) we are seeing a nationwide trend to address lenders’ inability to find an appraiser to perform an appraisal for the fee offered or within the desired time period.
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