Two lawmakers serving on the House Financial Services Committee introduced HR 3044 late last week in an effort to temporarily lift new requirements from valuations and the way appraisals are ordered.
The bill would impose an 18-month moratorium on the Home Valuation Code of Conduct, which took effect May 1.
Both sponsors of the legislation bring a history in housing. Rep. Travis Childers (D-Miss.), who introduced the bill, bears a background in real estate while cosponsor Rep. Gary Miller (R-Calif.) sports a background in community development and single-family and custom home building.
Childers' aim in introducing the bill focuses solely on a small business issue present in the code. Local appraisers contacted his office saying the code negatively affects their business, according to Ben Lincoln, legislative director at Childers' Washington, D.C. office.
"This legislation is really for the industry to take a step back to see what needs to be done on a national level," Lincoln tells HousingWire
. "What's done in New York is not necessarily what needs to be done in Mississippi. The real estate markets are totally different."
Lincoln says the way the code doesn't allow third-party appraisers and instead mandates ordering appraisals through appraisal management companies (AMCs) poses a problem not only for local appraisers, but for the housing market in Childers' district. There is no AMC located within the district, according to Lincoln, which means any appraisers conducting valuations within that district are not local to the area.
An issue emerging among critics of the code -- by the National Association of Realtors and other industry groups -- is the way lender-owned AMCs pose a disconnect between appraisers and the geographic areas where they are assigned to conduct valuations. One of HousingWire
's sources, an industry veteran with nearly three decades of experience in the appraisal business, says he's seen appraisers from AMCs drive up to two and a half hours away to complete an assigned appraisal.
Critics say this situation leads to faulty valuations by appraisers with little or no background in the local housing market and the history of house prices there.
Another one of HousingWire
's sources, however -- an appraiser that asked not to be named in this article -- says the proximity complaints are incredible, as not even an AMC cannot reasonably force its appraisers to travel hundreds of miles to complete a valuation.
HR 3044 along with its HVCC moratorium were referred to the House Committee on Financial Services.
Subscribe here and make sure you receive the forthcoming August issue of
HousingWire, which looks in depth at the argument surrounding the HVCC and its effect so far on the industry.
Write to Diana Golobay