NAHB: Appraisal Reform Necessary for Sound Market

As regulatory institutions begin to provide some clarity to the mortgage market, the ""National Association of Home Builders (NAHB)"":http://www.nahb.org/ insists the market still lacks confidence and is badly in need of a sound and functional appraisal system.

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""At the center of this ongoing crisis in confidence is an appraisal system that remains dysfunctional and is a major impediment to reestablishing a vibrant and stable housing finance framework,"" NAHB stated in a white paper released last week, titled ""_A Comprehensive Blueprint for Residential Appraisal Reform._"":http://www.nahb.org/fileUpload_details.aspx?contentID=195703

Appraisal reform ""must be a principal element of efforts to rebuild the nation's housing finance system,"" NAHB stated.

Regulatory reform is a key issue in constructing a reliable appraisal system, according to NAHB. Uniformity and [COLUMN_BREAK]

streamlining are two major themes in NAHB's proposed solutions.

New regulation should establish a set of best practices and uniform standards for the industry, set in place standard licensing and certification requirements, and create a group to oversee data and technology standards for the industry, according to NAHB.

Currently, appraisal oversight is generally left to the states. While NAHB suggests ""states should retain primary responsibility for certifying and overseeing appraisers and the quality of their work,"" the association suggests federal regulatory bodies ""should dictate that disciplinary actions are meted out in a consistent manner.""

In order to ensure transparency and consistency in the industry, NAHB suggests creating a ""real estate data superhighway,"" which would include a mandatory registry of all ""real property"" as well as data pertaining to mortgage-backed securities.

As another step in ensuring transparency, NAHB suggests the creation of a website that would explain the appraisal process and inform people about how to decipher appraisal reports.

Additionally, the industry should create a new appraisal report format that is ""simpler and easier to read,"" according to NAHB.

Lastly, the NAHB stated the importance of setting up a standard appeals process for inaccurate appraisals.