While debate continues, the head of the nation’s largest independent appraisal company said Monday that he supports sweeping industry reforms set into motion by an agreement between New York Attorney General Andrew Cuomo and the GSEs. “There is no doubt that restoring the independence of professional appraisers is the most viable and expeditious solution to restoring consumer confidence in local residential markets,” said Tim Forsythe, CEO of the company that bears his name. “That’s why we support the spirit of the agreement which is designed to ensure appraiser independence. However, we need to fully consider the potential ramifications. This agreement casts a very broad net.” Forsythe noted that over-aggressive lending policies in the past few years created situations where appraisers around the country felt pressured to provide a particular value for a home or condominium in order to close the sale. From ‘tweaking’ the numbers to providing fraudulent information, these unethical and illegal actions have severely impacted the nation’s residential marketplace, he added. Testifying on Capitol Hill last June, Alan Hummel, senior vice president and chief appraiser for Forsythe Appraisals and then-chairman of the Appraisal Institute’s Government Relations Committee, said many appraisers face pressure in mortgage transactions. “They are told to doctor their appraisals or else never see work from those parties again,” Hummel told the Senate Subcommittee on Housing, Transportation, and Community Development. A widely-cited study published recently by October Research Corp. found that 90 percent of respondent appraisers indicated that they felt pressure to raise property valuations to enable deals to go through, up 35 percentage points from levels reported in 2003. “Appraisers, as the only independent party in a mortgage transaction, do not benefit from raising or lowering the valuation of a property, yet they face loss of employment unless they succumb to pressure to provide a fraudulent report,” said Hummel. “It is time to elevate the practices of many lending professionals and create a single standard for ordering appraisals,” said Hummel. “We need to aggressively enforce laws to punish bad actors.” Although the proposal is still in its early stages, industry sources tell HW that the new standards will likely eliminate broker-ordered appraisals and reduce the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages. “Other changes will be made, but I doubt these cornerstone provisions will move much,” said one source, an appraiser who asked not to be named. “Ultimately, it is the appraiser whose valuation remains attached to the loan – even if the mortgage broker goes out of business or the lender resells the loan,” said Forsythe. “Appraisers understand they are accountable for their work, and the proposed agreement will go a long way to strengthening their independent role in the valuation process.”