I am very pleased to provide this informal report on the progress made by the Appraisal Subcommittee (ASC) since I became Chair. Before detailing our successes, I would like to acknowledge and thank Jim Park, whose tenure as ASC Executive Director just ended on January 1, 2025. I want to express my gratitude for his service to the ASC for more than 15 years.
When I assumed the Chair of the ASC on April 1, 2022, I set several priorities:
- Collaborating with all stakeholders to ensure appraisals are performed accurately and without bias and to promote a qualified, diverse, and plentiful universe of appraisers across the country;
- Completing the required Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) rulemakings and actions, especially the one related to creating a system of prompt corrective action for the oversight of state appraisal regulatory agencies;
- Improving oversight and accountability of The Appraisal Foundation (TAF or Foundation) and State appraiser and appraisal management company (AMC) regulatory programs;
- Improving ASC governance and accountability; and
- Ensuring appropriate and adequate ASC staffing to effectively discharge agency responsibilities and adapt to enhanced expectations and regulatory changes.
The ASC has made significant progress on these priorities:
The ASC held four hearings between January 2023 to February 2024, exercising its dormant authority to hold hearings. These hearings explored topics related to appraisal bias and barriers to entry in the appraisal profession. The ASC heard from a range of stakeholders who served as witnesses, including Paul and Tenisha Tate-Austin, a couple from California who shared their personal and painful experience of having to hide who they are to get an appraisal that was independent, fair, and free from bias. Other witnesses included representatives from state governments, trade associations, fair housing advocates, TAF, and appraisers. The ASC also received 150 written comments from varied stakeholders, including appraisers, trade associations, consumer advocates, government regulators, lenders, and researchers. The four hearings and comments informed the ASC’s deliberations and helped to reinvigorate a substantive dialogue between the ASC and TAF.
On November 20, 2024, the ASC Board approved a Notice of Proposed Rulemaking (NPRM) related to formalizing a system of prompt corrective action. Under Dodd-Frank Act amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Congress provided the ASC with certain enforcement authorities with respect to state appraiser certifying and licensing agencies, including authority to impose sanctions on ineffective appraiser regulatory programs. If finalized as proposed, the rule would formally implement some of these authorities. This NPRM was published in the Federal Register on December 6, 2024, with a comment period that closes on February 4, 2025.
In addition to this NPRM, the ASC resumed on-site Compliance Reviews of State appraiser and AMC regulatory programs in January 2023. Since the reviews resumed, the ASC has issued 58 final reports. In my role as Chair, I approved five reports that rated State Appraiser or AMC Programs as “Needs Improvement.” The ASC Board approved four reports that rated State Appraiser or AMC Programs as “Not Satisfactory.”
The ASC has also recently engaged in significant grant-making activity with respect to state regulatory programs. The ASC issued nine grants to state regulatory programs in response to the Fiscal Year 2024 State Appraiser Regulatory Agencies Support Notice of Funding Availability. Three of these grants were to first-time recipients. Finally, the four hearings included three witnesses from state regulatory programs, who described the unique ways federal support could enhance state compliance programs, highlighting notable innovative approaches such as the Mississippi Practical Appraiser Training (MPAT) program.
The ASC took meaningful strides in carrying out its statutory mandates related to its charge to monitor and review the practices, procedures, activities, and organizational structure of TAF. Since March 2022, the ASC has sent 13 letters to the Foundation: eight from ASC staff and five from the ASC Board. Topics included governance, standards of conduct and ethics, and barriers to entry into the profession, among other topics. I also independently wrote three letters in 2023 to the Foundation specifically related to their governance structure. The Foundation’s Board of Trustees voted to change its governance structure on December 12, 2023. Paying sponsors can no longer directly appoint members of the Board of Trustees. The Board’s composition goals now include consumer advocates, civil rights advocates, and fair housing advocates. Additionally, in 2024 the Foundation applied for and received an ASC grant for the first time since 2020.
On June 22, 2023, the Foundation’s Appraiser Qualifications Board also updated the Real Property Appraiser Qualification Criteria (Criteria) to make fair housing education a required component of an appraiser’s qualifying and continuing education. The ASC provided comments on revisions. The updated Criteria will go into effect on January 1, 2026.
The chairs of the Foundation’s Appraisal Standards Board and Appraiser Qualifications Board served as witnesses at the ASC’s second hearing in May 2023, while longtime former Foundation President David Bunton was a witness at the final hearing in February 2024.
On November 20, 2024, in response to information gathered during the hearings and from other sources, the ASC Board unanimously voted to approve a revised TAF Monitoring and Reviewing Policy that specifies that ASC staff plan to attend closed sessions of TAF’s three Boards to carry out the ASC’s monitor and review mandate. For four years, ASC staff were precluded from monitoring and providing feedback on matters deliberated in closed sessions affecting appraisal standards and appraiser professional criteria. TAF had already started inviting ASC staff back to closed sessions and expressed increased openness to ASC feedback, including substantive concerns about proposed policies.
The ASC made several changes to improve governance and accountability. In November 2023, the ASC Board approved a 5-year Strategic Plan that ASC staff developed with input from a consultant and the ASC Board. This plan includes the ASC’s strategic outlook and three goals for FY24 to FY28. The goals concern innovating and modernizing processes, technology, and operations; supporting states’ ability to maintain compliance with Title XI and strengthening TAF oversight; and increasing the ASC’s competencies, skills, and diversity. Finally, with respect to staffing, the ASC has expanded its formal headcount and made skilled hires.
By any measure, the ASC has made considerable strides. The agency has matured its staffing and operational framework, advanced its exercise of its statutory authority over state compliance programs and the Foundation, and exercised previously dormant authority. And, the ASC has evolved its engagement with the Foundation in furtherance of the ASC’s mission to oversee the real estate appraisal regulatory framework for federally related transactions, with a focus towards progressing regulatory conditions for improvements in the appraisal market.
