As the House and the Senate work through proposed changes to the newly proposed Troubled Asset Relief Program
, in which the government will relieve lenders of illiquid mortgage securities, potentially to the tune of $700 billion, in a September 24 joint letter from the Appraisal Institute
, American Society of Appraisers
, the American Society of Farm Managers and Rural Appraisers
, and the National Association of Independent Fee Appraisers
, has encouraged policymakers to include valuation-related language in the massive bill, as well as bring to the fore the many valuation-related issues involved. The current drafts of the TARP program
do not adequately address such critical issues of valuation, according to a September 24 letter the organization wrote to Treasury Secretary Henry Paulson, Jr., and Federal Board Chair Ben Bernanke.
"Virtually every level, including the purchase and management of assets, requires specialized real estate appraisal expertise to promote the protection of taxpayers and the public interest," said Bill Garber, director of government relations at the Appraisal Institute. "However, the current proposal pending before Congress does not sufficiently address valuation concerns, an issue in which the consumers and businesses in this country need restored confidence."
The appraisal groups provided several suggestions to protect taxpayers, including:
1. Establishing an executive-level chief appraiser to create appraiser qualification criteria at the Federal Deposit Insurance Corporation.
2. Conducting verifiable portfolio analysis by qualified, local appraisers to increase confidence levels in the current market. .
3. Protect neighborhood property values by requiring the use of professional, qualified real estate appraisers that adhere to generally accepted appraisal standards, to conduct the valuation of such property.
"The network of appraisal organizations stand ready to assist the Treasury, FDIC,
Congress and others involved in crafting this critical program to provide accurate valuations of properties used at all levels," added Garber. "The solution to the current crisis requires massive mortgage renegotiations, and we strongly believe that expert advice at the street level can restore stability in the mortgage market and build a foundation to turn the tide for other financials."
Do you agree with the Appraisal Organizations?
What do you think of their suggestions to provide protection to the taxpayers?
Are there other items that should be suggested?
Professional Affiliations/Community Activities: MAI Member of The Appraisal Institute, CCIM Designee of the CCIM Institute, Member of the International Council of Shopping Centers, Florida State Certified General Real Estate Appraiser #RZ300, Florida Licensed Broker.
· Corporate Office · 12800 University Drive, Suite 150 · Fort Myers, FL 33907 ·
(239) 275-4922 · Fax: (239) 275-4699