Appraisal Institute Says
Mortgage Fraud Still a Priority in Congress

According to the Appraisal Institute’s Washington, D.C., office, the 109th Congress saw the most significant appraisal-reform legislation introduced in more than a decade and despite some slowdown in addressing the legislation, the issue remains far from dead in the halls of Congress.

Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., introduced the Responsible Lending Act (H.R. 1295) in 2005. Earlier this year, Sen. Barack Obama, D-Il., introduced legislation designating mortgage fraud as a crime and providing grant money to state appraisal regulatory agencies. Since then, the Financial Services Committee held a hearing on H.R. 1295, but it has not been able to bring it forward in committee for a vote. Additionally, Ney announced recently that he will not seek reelection this year. Meanwhile, no action has occurred in the Senate on Obama's mortgage fraud bill. Does that mean the issue has been shelved?

"Hardly," says Bill Garber, Director of Government Affairs of the Appraisal Institute. "It is common for bills of this magnitude to take time to work themselves through the legislative process, and while it doesn't show itself on paper yet, significant progress has been made on these bills."

For one, House Financial Services committee members have been in negotiations over two bills (H.R. 1295 and a competing measure, H.R. 1182) dealing with predatory lending and mortgage fraud for a little over a year. Committee staff members have indicated to the Appraisal Institute that progress has been made in these negotiations in recent weeks. While no action is expected with the elections around the corner, the Appraisal Institute expects this issue will be near the top of the committee's agenda in the 110th Congress, which begins in January 2007.

"The prognosis appears positive for this issue to be addressed early next year," says Garber. The Appraisal Institute is pleased by the positive response thus far to the appraisal provisions of H.R. 1295, which have been well received by members of the committee and as an industry as a whole. "The Appraisal Institute is pleased to see the appraisal provisions of H.R. 1295 have been very well received by members of the committee. We've long held that appraisal regulatory reform, including a ban on inappropriate client pressure and reform of federal and state appraisal regulatory operations, should be incorporated into any bill that attempts to curb mortgage fraud, and such reforms appear to be making their way into current discussion.”

The Appraisal Institute seeks reader feedback as it prepares enhanced recommendations to Congress on the issue of mortgage fraud. More information on these bills can be found on the Appraisal Institute Government Affairs section of the Web site, www.appraisalinstitute.org/govtaffairs/default.asp. To respond, contact the Appraisal Institute Washington office at 202-298-6449 or to any staff member directly: Don Kelly, dkelly@appraisalinstitute.org; Bill Garber, bgarber@appraisalinstitute.org; Isabel Parker, iparker@appraisalinstitute.org; or Justin Morton, jmorton@appraisalinstitute.org.

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