Waters Asks GAO to Probe Risks Posed by Increasing Appraisal Thresholds
The NCUA is considering increasing the threshold of residential purchases that would require an appraisal from $250,000 to $400,000.
House Financial Services Chairman Maxine Waters (D-Calif.) is asking the Government Accountability Office to investigate the risks created by the NCUA and other federal agencies that have proposed exempting a larger number of home purchases from appraisal requirements.
The NCUA is considering increasing the threshold of residential purchases that would require an appraisal from $250,000 to $400,000 — a plan that other banking regulators already have adopted.
Waters and Rep. William Clay (D-Mo.), chair of the committee’s housing subcommittee, said in a letter to the GAO that they are concerned agencies have diluted the original congressional intent of the federal law requiring appraisals.
“We are also concerned that the current rules implementing the appraisal requirement may be insufficient to protect homeowners from the risks associated with an inaccurate home valuation,” they wrote.
They added that the appraisal requirements were codified as a result of investigations into the causes of the savings and loan crisis of the 1980s.
They also said financial regulators are allowing evaluations rather than appraisals when a purchase falls below the threshold but added there is little agency guidance about those evaluations.
In comments filed with the NCUA on its proposal to increase the threshold, credit union officials said the increase would help solve some of the delays potential homeowners face when purchasing a home.
However, officials from trade groups representing appraisers said the appraisals represent a safeguard for potential home purchasers.