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<p>WASHINGTON – The Appraisal Institute, the American Society of Appraisers and the National Association of Realtors applauded the efforts of Sen. Paul Sarbanes (D-Md.) and Sen. Zell Miller (D-Ga.) for their initiative to investigate mortgage and real estate consumer fraud. The groups wrote to the senators and lauded their request of the General Accounting Office to investigate the appraisal regulatory structure. The three organizations also noted in their letter that more work needs to be done to solve the problems associated with residential mortgage fraud. “We are concerned about the effectiveness of the current regulatory structure for appraisers as created by Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA),” the letter stated. “This is a complex system that involves numerous boards and agencies at the state and federal level that are interrelated in the licensing and certification of appraisers and the enforcement of standards of practice. We believe the defects in the system must be corrected.” The groups further wrote that while the intention of Title XI was to raise the professionalism of appraisers who are involved in federally related transactions, the appraisal associations believe Title XI has actually hindered the development of the profession, promoting only “minimum” qualifications for appraisers and failing to provide effective federal oversight of the system. The three groups urge the GAO investigation to include: The conditions that allow for improper influence of appraisers by clients and third parties, such as loan originators, mortgage brokers and others with an interest in the transaction; The lack of consistent state appraiser board enforcement activities; and The failure of the Appraisal Subcommittee to provide meaningful oversight of state appraiser boards.</p>

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