Martinez introduces appraiser bill in U.S. Senate

WASHINGTON – April 16, 2008 – U.S. Sen. Mel Martinez (R-FL) joined with Senator Bob Casey (D-PA) in introducing legislation to reform the home appraisal process to deter appraisal fraud schemes – the “Fair Value and Independent Appraisal Act.”

“There are some truly bad actors out there posing as legitimate appraisers,” says Martinez. “The ripple effect has worsened the mortgage crisis. There continue to be too many unchecked components in the appraisal process. This will protect both consumers and lenders by improving oversight and putting more checks in place.”

In cases of appraisal fraud, an appraiser and a mortgage broker work together to sell homes at higher prices than they’re worth. An appraiser inflates the value of a property, which increases the size of the mortgage, leaving many homeowners in foreclosure and the lender with a worthless home.

This legislation will:

• Require a physical property visit and a second independent appraisal for any high-interest, high-risk mortgage offered for a property sold at a higher price within 180 days of its last purchase.

• Ensure appraiser independence by prohibiting interested parties from improperly influencing a property appraisal.

• Ensure that appraisers are qualified and follow certain minimum standards.

• Require a mortgage originator to make available to the credit applicant all appraisal valuation reports no later than three days prior to the transaction closing date.

• Set increased civil penalties for violating these provisions – $10,000 for the first violation; $20,000 for the second.

© 2008 FLORIDA ASSOCIATION OF REALTORS®

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