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Home > News & Events > Press Releases

Press Release
October 18, 2010

Federal Reserve announces interim final rule on
real estate appraisal
For immediate release
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The Federal Reserve Board on Monday announced an interim final rule
to ensure that real estate appraisers are free to use their independent
professional judgment in assigning home values without influence or
pressure from those with interests in the transactions. The rule also
seeks to ensure that appraisers receive customary and reasonable
payments for their services.
The interim final rule includes several provisions that protect the integrity
of the appraisal process when a consumer's home is securing the loan.
The interim final rule:
Prohibits coercion and other similar actions designed to cause
appraisers to base the appraised value of properties on factors
other than their independent judgment;
Prohibits appraisers and appraisal management companies hired
by lenders from having financial or other interests in the
properties or the credit transactions;
Prohibits creditors from extending credit based on appraisals if
they know beforehand of violations involving appraiser coercion or
conflicts of interest, unless the creditors determine that the values
of the properties are not materially misstated;
Requires that creditors or settlement service providers that have
information about appraiser misconduct file reports with the
appropriate state licensing authorities; and

Requires the payment of reasonable and customary
compensation to appraisers who are not employees of the
creditors or of the appraisal management companies hired by the
creditors.
The interim final rule is required by the Dodd-Frank Wall Street Reform
and Consumer Protection Act. Compliance will be mandatory on April 1,
2011. Public comments are due 60 days after the interim final rule is
published in the Federal Register, which is expected soon.
Federal Register notice: HTML | 271 KB PDF
Federal Register notice, technical correction: HTML | 53 KB PDF

Last Update: October 25, 2010

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