by Tamora Papas, SRA,
CRP
In 1989 the US Congress passed Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), more commonly known as the Savings and Loan Bailout Bill. FIRREA established a real estate appraiser regulatory system involving the Federal Government, the states, and The Appraisal Foundation (Foundation).
Each US state or territory has a real estate appraiser regulatory agency that is responsible for licensing and certifying real estate appraisers and supervising their appraisal-related activities, as required by Federal law. The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council monitors and reviews the work of The Foundation. The ASC also maintains oversight authority over the states to ensure the minimum qualifying criteria to license and certify real estate appraisers are implemented and that appraisers are held to a professional set of ethical standards.
The Foundation’s Appraiser Qualifications Board (AQB) sets the minimum Real Property Appraiser Qualification Criteria, and the Appraisal Standards Board (ASB) develops the generally accepted standards of practice for the appraisal profession (the Uniform Standards of Professional Appraisal Practice).
Federal Regulatory Update:
Notice of Public Rule Making (NPRM) – “Quality Control Standards for Automated Valuation Models”
ASC Dashboard – “Reducing Barriers to the Appraisal Profession:
AQB Valuation Bias, Fair Housing and Equal Opportunity QE and CE
Federal National Mortgage Association (FNMA), better known as Fannie Mae:
State Tips - Appraisal sent to state regulatory agencies for Loan Quality defects/repurchase.
State Referrals – Formal complaint to state regulatory agencies based on the identification of appraisal issues.
State regulators have complete discretion on what to do with the tips and referrals.
You may also have received or may receive Educational Letters; Follow-up Letter or third Letter from Fannie Mae/Freddie Mac regarding concerns about your appraisals. They have been sending these out for years.
Things to remember:
- Everyone signing the Appraisal Report (AR) must be licensed in the District and anyone who contributes to the AR must be mentioned in the addendum AND the Certification Page
- AQB – A supervisor may only supervise three trainees at any given time.
- The form report Certification Section does not meet USPAP standards, therefore, every report should have a separate ‘signed’ certification page with a signature block that meets USPAP. Research “Sample Certification Statements for appraisal reports” to find the required language. – side note – many of our reviews of complaints will find that the appraisal report is USPAP compliant EXCEPT for the lack of a separate signed Certification Statement. Make sure you are compliant.
- Learn the Prohibited Factors and Subjective Terms to use and not use. Fannie Mae Selling Guide and Freddie Mac – “development of a valuation conclusion based… on the sex, race, color, religion, disability, national origin, familial status, or including a reference to any protected class…”
“Use of unsupported assumption, interjection of personal opinion, or perceptions…and the use of subject terminology, including… pride of ownership, no pride of ownership…poor neighborhood; good neighborhood; crime-ridden neighborhood; desirable neighborhood or location; or undesirable neighborhood or location…”
I know these may seem obvious, but this is what Fannie Mae/Freddie Mac are seeing and scanning for, so just don’t use this type of terminology. Both have their selling guides available to reference the dos and don’ts.
Watch this space:
A new dynamic uniform residential appraisal report for all residential properties will be coming out soon.
For all residential property types, all agency assignment types and all appraisal service types.
PAREA Update – We are currently waiting for the completed approval process which is working it way through the Mayor’s office. Currently the Appraisal Institute has an approved course out and we are waiting for other providers including McKissick and others. A real boost to overcoming the entry barriers into the Appraisal Profession.
Trainees and Supervisors - We are inviting all trainees and supervisors to come to a Board meeting early or midway through your training. We invite you to bring us your log and a sample report so that we can review it and make sure everything is compliant. We have had instances where the log and trainee were not in compliance after all their hard work and time. Don’t let that happen to you! No disciplinary action will be taken for either the supervisor or the trainee during this review period should we find any errors. Do it right the first time. That’s what we are here for.
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What's New In USPAP?
Updated and expanded Ethics Rule with new Non-Discrimination Section and new Advisory Opinions. This includes: The Fair Housing Act (FHAct); The Equal Credit Opportunity Act (ECOA); and The Civil Rights Act of 1866.
On the horizon: New Qualifying Education and Continuing Education Requirements for all Licensees nationwide. For DC Licensees, these will need to be completed prior to the February 2026 license period since they are required by January 2026. The new required hours are not in addition but will be incorporated into your 28-hour CE requirement. This may be a little confusing, but here it is:
New continuing education requirements must be completed by January 1, 2026. All licenses nationwide will need to take a course which meets the content requirements of the Valuation Bias and Fair Housing Laws and Regulations Outline every two years (similar to USPAP requirement)
- a) The First time the appraiser successfully completes the course, the course length must be 7 hours. If an appraiser successfully completes a 7-hour (plus 1 hour exam) course as part of their qualifying education, they have met this requirement.
- b) Every two calendar years thereafter, the course length must be at least 4 hours.
The DC Board of Real Estate Appraisers held the new 7 Hour USPAP course to our DC licensees on December 1, 2023, from 9:00 am to 5:00 pm at the office of the Department of Licensing and Consumer Protection (DLCP). The course was free to licensees and included a copy of the 2024 USPAP manual along with the reference guide.
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Leon Lewis, Program Manager
Leon Lewis, Program Manager to the DC Board of Real Estate Appraisers, was recently elected as a member of the Association of Appraisers Regulatory Officials (AARO) Board of Directors. Mr. Lewis will serve in that capacity beginning January 1, 2024, through December 31, 2024. Mr. Lewis will be providing leadership to the AARO Board in all areas, inclusive of its mission to serve as an advocate for member jurisdictions as to enforcement and administration of appraiser and appraisal management companies’ regulatory laws, as well as to provide leadership in all areas of AARO. We are proud to maintain a DC presence on the AARO Board of Directors.
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The District of Columbia Board of Real Estate Appraisers regulates the practice of real estate appraisal, including the functions of a state appraiser certifying and licensing agency under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, approved August 9, 1989. The Board is tasked with protecting the public trust - through education, guidance, and discipline when necessary.
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Meetings are scheduled on the third Wednesday of the month at 10:00 am.
December 20, 2023
January 17, 2024
February 21, 2024
March 20, 2024
April 17, 2024
May 15, 2024
June 19, 2024
July 17, 2024
August Recess
September 18, 2024
October 16, 2024
November 20, 2024
December 18, 2024
Dates are subject to change. Call 202-442-4320 for updates.
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