2021 promises to be a big year for the appraisal profession. The coronavirus pandemic forced appraisers to quickly adapt, and we had to tackle a wide range of unexpected changes to daily work and life. 2021 will also be a year of changes here in Washington as Joe Biden is sworn in as the 46th President of the United States and the 117th Congress begins with Democrats controlling both chambers. It will be an exciting time in Washington, and, at The Appraisal Foundation, we are looking forward to working with these leaders to continue to build the public trust in the appraisal profession.
The summer of 2020 saw news coverage discussing specific cases of alleged racial bias in real estate appraisals. Then-candidate Biden announced several initiatives to “tackle racial bias that leads to homes in communities of color being assessed by appraisers below their fair value,” and we anticipate there will be action related to these proposed programs in the 117th Congress. We look forward to serving as a resource for the new administration and leaders in Congress on any legislation or executive action stemming from these proposals. There is no place for bias or discrimination in appraisals, as the Uniform Standards of Professional Appraisal Practice (USPAP) clearly state. However, it is clear we must do more.
But, the Appraisal Foundation did not just wait to see where these initiatives might go. We also took immediate action. Working with the Appraisal Institute and our sponsors, we held a symposium on Promoting Trust for Fair and Affordable Housing where we heard from researchers, appraisers and lenders about how this issue is impacting the appraisal profession and how we can move forward. We are also adding a new section to our required seven-hour USPAP update course that will examine issues related to bias and focus on fair housing related issues. We are also looking into updating additional advisory language in our publications, and we continue to explore how we can make the appraisal profession more reflective of the nation we live in through our Special Committee on Diversity and Inclusion and the Appraiser Qualifications Board’s Real Estate Degree Review Program.
Turning back to the new Congress, there is legislation that we expect to be introduced or reintroduced addressing various aspects of the appraisal profession. In the 117th Congress, we anticipate the introduction of a number of bills that would expand the Appraisal Subcommittee to include representatives from the Department of Veterans Affairs and Rural Housing Service, allow licensed appraisers to appraise properties for the Federal Housing Administration and another that would create an appraiser registration portal modeled after the portal created by the Nationwide Multistate Licensing System & Registry for mortgage brokers. Each of these changes would strengthen both the appraisal profession and public trust across the country, and we have and will continue to guide leaders in Congress as these bills are drafted and introduced.
In addition to the expected movement on these bills, we are looking forward to the release of a forthcoming Government Accountability Office (GAO) study. Last February, Congresswoman Maxine Waters and then-Congressman William Lacy Clay announced a request to the GAO to conduct a study on Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which set up today’s appraisal regulatory system.
The study is set to focus on federal practices that exempt many real estate transactions from being required to have appraisals completed as a part of the transaction process. I had expressed concerns about these exemptions and the implementation of FIRREA on multiple occasions, both in letters and testifying in front of then-Congressman Clay’s subcommittee in 2019. While this study was slowed down by the coronavirus pandemic, we hope to see the results of this examination released this year.
The Appraisal Foundation is looking forward to collaborating with the new Biden Administration and the 117th Congress on all of these initiatives and more in the coming months and years. Working together, we are confident that we can find innovative ways to solve today’s problems and continue to build public trust in the appraisal profession.
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