New rules to lead to more qualified appraisers.
Licensing and certification for appraisers resulted from enactment of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), which requires the use of state licensed or certified appraisers for most real estate transactions involving rederally regulated or insured financial institutions. Originally, the law required states to have in place an appraisal regulatory system by July 1, 1991. However, Congress extended that start date to Jan. 1, 1993, to allow states additional time to implement 'licensing and certification programs that comply with the federal mandate. NAR and other groups supported the extension as a method to avoid severe shortages of licensed or certified appraisers, which could have led to significant back ups in obtaining appraisals and the underwriting of mortgages.
According to NAR, there were 18,311 licensed and certified appraisers in 30 states, at the end of 1991. However, the association recorded nearly 59,000 licensed and certified appraisers in all 50 states as of December 1992.
According to Larry Demarcay, Jr., 1993 chairman of NAR's Real Estate Appraisal Committee, the increase in the number of licensed and certified appraisers recorded by the association between 1191 and 1992 illustrates how great the problem could have been without an extension.
Regulations issued by the Federal Reserve Board and other federal financial institution regulatory agencies distinguish between types of transactions that require the services of licensed or certified appraisers. Certified general appraisers may perform work for all residential and nonresidential transactions. Certified residential appraisers may perform work for all residential transactions, but only on non-residential transactions under $250,000. Licensed appraisers may only work on residential transactions valued up to $1 million, and non'residential transactions under $250,000. The Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and the Resolution Trust Corp. require licensed or certified appraisers on transactions valued at $100,000 or above.
NAR's Appraisal Section, with more than 5,000 members, was created in March 1991 to meet the specialized needs of Realtors involved in the appraisal industry. Currently, more than 80,000 NAR members are either fulltime or part-time appraisal practitioners. At its 1992 Annual Convention and Trade Exposition, NAR's Board of Directors approved an amendment to the association's policy to permit licensed and certified appraisers to qualify for Realtor membership, and thereby become eligible to participate in a board's Multiple Listing Service.
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|Title Annotation:||Financial Institutions Reform, Recovery and Enforcement Act legislated by federal government requires state license and certification for real estate appraisers after January 1, 1993|
|Publication:||Real Estate Weekly|
|Date:||Jan 13, 1993|
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