Housing Groups Lobby Regulators on Appraisals

Washington, DC, September 22, 2009--The National Association of Home Builders  hosted a Residential Real Estate Appraisal Summit on Monday with federal regulatory agencies and the major housing and financial institution stakeholder and appraisal organizations to discuss constructive solutions to appraisal problems.

Among the problems discussed at the summit was the use by some appraisers of foreclosed or other distressed properties as comparables without proper adjustments.

Summit participants also addressed unintended consequences from the implementation of the Home Valuation Code of Conduct, which are impeding the ability to obtain appraisals of the quality required in today’s distressed markets.

These practices, including reports that some appraisers are working in areas where they don’t know the market, are driving down home values and impacting home sales as inaccurate appraisals are coming in below the contract sales price, NAHB said.

This is causing unwarranted downward pressure on home prices, NAHB said, at a time when housing and the economy are struggling to emerge from the worst downturn in decades.

Following the meeting, the leadership of NAHB, the National Association of Realtors and the Mortgage Bankers Association were united in calling for immediate action to address their appraisal-related concerns, including clarifications with regard to the HVCC and the establishment of “best practices” for the appraisal process.