The House Financial Services Committee on July 29 approved H.R. 5148, the Access to Affordable Mortgages Act, which would exempt certain “higher-risk” mortgages from some newly enacted appraisal requirements while also exempting appraisers from the Uniform Standards of Professional Appraisal Practice in those situations, the Appraisal Institute reported.
The bill would provide lenders exemptions from obtaining full interior inspection appraisals or second appraisals in property “flipping” situations where the loan is classified as “higher risk” (otherwise known as subprime). Both exemptions only apply where the higher-risk requirements are triggered, the loan amount is less than $250,000 and the loan is kept on the creditor’s balance sheet for at least three years, which is projected to only be a small number of loans.
AI supports H.R. 5148 because it provides much needed regulatory relief to appraisers in the small number of cases the exemptions would apply. Appraisers would not have to adhere to USPAP requirements when providing valuation services that adhere to “evaluation” requirements of the federal bank regulatory agencies, which would remain intact. As such, appraisers would be better equipped to provide lenders a range of valuation services that suit the needs of the situation.
AI continues to track H.R. 5148, noting that it’s unsure when the legislation will get a vote on the House floor.