Appraisal Institute calls for RTC appraisal reforms.
"Tke troubled nature of many RTC properties makes it imperative that the services of highly qualified appraisers be utilized," said Appraisal Institute President Patricia J. Marshall, MAI. "The use of unqualified appraisers could lead to faulty appraisals which jeopardize the amount of money recovered by the RTC."
A recent study by the General Accounting Office (GAO) found that 69 percent of the RTC's review appraisers were under qualified for their positions. Only 10 percent were "qualified" and 21 percent "probably qualified," according to the GAO.
Review appraisers' lack of experience was attributed to the RTC's lack of specific hiring criteria. To improve the quality of appraisers hired, the GAO recommends that the RTC develop and implement detailed qualification standards and hiring criteria. This improved process should require applicants to support appraisal-related educational background experience with more complete data, GAO suggests.
In a letter to Albert V. Casey, RTC chief executive officer, the Appraisal Institute, urged the RTC to take the selection process one step further. Once submitted, qualifications should be rigorously verified and continuously updated. "The perception that qualifications are not verified could foster abuse of the system," Appraisal Institute President Marshall stated in the letter. "The RTC needs to get accurate information to select the best appraiser for the job, and appraisers who have repeatedly performed substandard work must be removed from consideration for additional assignments."
The GAO study also renews the call for a senior executive level chief appraiser to manage and assess implementation of the appraisal program. The Appraisal Institute has long supported the appointment of such an individual to oversee the standardization and improvement of procedures nationwide. As the leader in the fight for appraisal reform, the Appraisal Institute expressed its concerns in a letter to Sen. Pete Domenici (R-NM) of the Senate Banking Committee who forwarded the letter to the RTC for response.
The RTC has ordered more than 100,000 appraisals since its inception. If properties are valued too high, they may not sell. If valued too low, properties might sell for less than they are worth. The GAO study reiterated the need to prevent further losses stemming from the savings and loan crisis. "It is important that RTC be able to ensure that faulty appraisals do not adversely affect the value of its assets and the amount realized when they are sold."
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|Title Annotation:||Resolution Trust Corp.|
|Publication:||Real Estate Weekly|
|Date:||Jul 8, 1992|
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