U.S. Rep. Tom Emmer (R-MN) is calling for reforming cumbersome home appraiser regulations that have led to delays in the appraisal process and increased costs for consumers who want to purchase homes.
In a Nov. 4 letter Rep. Emmer led to Sandra Thompson, the acting director of the Federal Housing Finance Agency (FHFA), the congressman wrote that while home appraisers are more in demand than ever, there has been a 20 percent to 25 percent drop in the number of registered appraisers over the last 12 years.
“Regulatory burdens are a major barrier to entry: high training and licensing costs, financial disincentives for existing appraisers to train new appraisers, and other challenges are making this profession less attractive to new talent,” the letter said.
Given that the FHFA has regulatory authority over the appraisal process, Rep. Emmer’s letter proposed three reforms, including a review of current appraisal management company models, which could serve as “unnecessary middlemen” in the appraisal process and raise costs for consumers.
The letter also called for evaluating alternatives to the traditional appraisal process, including automated valuations models, hybrid appraisals, desktop appraisals, and other products that could be utilized without destabilizing the real estate market.
In addition, the letter proposed that current minimum educational and professional standards for appraisers, such as the requirement that appraisers obtain a college degree, be reformed. The letter suggested that alternative qualifications be considered to ensure the industry maintains appropriate standards without imposing barriers to entry for new professionals.
“Americans deserve the opportunity to buy a home without hidden costs. The FHFA should use their authority to update and improve the regulations pertaining to the appraiser industry in order to encourage more entrants into the profession, eliminate additional costs on homebuyers, and ultimately strengthen our economy,” Rep. Emmer said in a Nov. 4 statement.