Congress will target appraisers
CHARLOTTE, N.C. — Several members of Congress vowed to press to fix the system that monitors real estate appraisers but said Monday it is unlikely lawmakers will act before the end of the year, despite evidence consumers are falling victim to fraud.
"We just don't have a functional system yet," said Rep. Paul Kanjorski, a sponsor of unrelated appraisal reform legislation that passed the House last year. "We have to fix the system or it will be a long time before the economy recovers."
Kanjorski's comments came the day after The Associated Press published a six-month investigation that identified key failings in the nation's regulation of appraisers. The Pennsylvania Democrat said there isn't enough time to recast the House legislation, a version of which is stalled in the Senate, to address the AP's findings.
But Kanjorski said that if re-elected, doing so would be a priority. "The general public wants some standards that they can respect and be protected by on a national basis," he said.
The AP's investigation found that since 2005, more than two dozen states and U.S. territories have violated federal rules by failing to investigate and resolve complaints about appraisers within a year. Some complaints sat uninvestigated for as long as four years and as a result, hundreds of appraisers accused of wrongdoing remained in business.
Experts told the AP the failings helped contribute to the current meltdown of the nation's housing market, the worst since the Great Depression.
"Unless you have enforcement, nothing will change," said Kanjorski, who chairs a House subcommittee whose oversight includes the real estate appraisal industry. "Invariably, somebody's ox gets gored. But right now we don't have a uniformed standard. And that's part of the problem."
Kanjorski and Rep. Judy Biggert, R-Ill., sponsored appraisal reform legislation last year that passed the House in November. It would prohibit mortgage brokers, realtors and other interested parties from influencing or attempting to influence an appraisal.
The law would also require a lender to make the appraisal available to the home buyer no later than three days before closing, and set specific penalties for violating the law.
A similar bill introduced in the Senate by Sens. Bob Casey, D-Pa., and Mel Martinez, R-Fla., is stalled in that chamber's banking committee.
"Sen. Casey believes that a disturbing byproduct of the increased rates of foreclosure, as shown by these AP stories, is an increase in the number unscrupulous individuals who corrupt the appraisal process to artificially inflate home prices to increase profits by cheating home buyers," said Casey's spokeswoman, Kendra Barkoff.
