Subtitle F–Appraisal Activities

SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.

Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
amended by inserting after 129G (as added by section 1464(b)) the
following new section:
“Sec. 129H. <<NOTE: 15 USC 1639h.>> Property appraisal
requirements

“(a) In General.–A creditor may not extend credit in the form of a
higher-risk mortgage to any consumer without first obtaining a written
appraisal of the property to be mortgaged prepared in accordance with
the requirements of this section.
“(b) Appraisal Requirements.–
“(1) Physical property visit.–Subject to the rules
prescribed under paragraph (4), an appraisal of property to be
secured by a higher-risk mortgage does not meet the requirement
of this section unless it is performed by a certified or
licensed appraiser who conducts a physical property visit of the
interior of the mortgaged property.
“(2) Second appraisal under certain circumstances.–

[[Page 124 STAT. 2186]]

“(A) In general.–If the purpose of a higher-risk
mortgage is to finance the purchase or acquisition of
the mortgaged property from a person within 180 days of
the purchase or acquisition of such property by that
person at a price that was lower than the current sale
price of the property, the creditor shall obtain a
second appraisal from a different certified or licensed
appraiser. The second appraisal shall include an
analysis of the difference in sale prices, changes in
market conditions, and any improvements made to the
property between the date of the previous sale and the
current sale.
“(B) No cost to applicant.–The cost of any second
appraisal required under subparagraph (A) may not be
charged to the applicant.
“(3) Certified or licensed appraiser defined.–For purposes
of this section, the term `certified or licensed appraiser’
means a person who–
“(A) is, at a minimum, certified or licensed by the
State in which the property to be appraised is located;
and
“(B) performs each appraisal in conformity with the
Uniform Standards of Professional Appraisal Practice and
title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, and the regulations
prescribed under such title, as in effect on the date of
the appraisal.
“(4) Regulations.–
“(A) In general.–The Board, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the
National Credit Union Administration Board, the Federal
Housing Finance Agency, and the Bureau shall jointly
prescribe regulations to implement this section.
“(B) Exemption.–The agencies listed in
subparagraph (A) may jointly exempt, by rule, a class of
loans from the requirements of this subsection or
subsection (a) if the agencies determine that the
exemption is in the public interest and promotes the
safety and soundness of creditors.

“(c) Free Copy of Appraisal.– <<NOTE: Deadline.>> A creditor shall
provide 1 copy of each appraisal conducted in accordance with this
section in connection with a higher-risk mortgage to the applicant
without charge, and at least 3 days prior to the transaction closing
date.

“(d) Consumer Notification.–At the time of the initial mortgage
application, the applicant shall be provided with a statement by the
creditor that any appraisal prepared for the mortgage is for the sole
use of the creditor, and that the applicant may choose to have a
separate appraisal conducted at the expense of the applicant.
“(e) Violations.–In addition to any other liability to any person
under this title, a creditor found to have willfully failed to obtain an
appraisal as required in this section shall be liable to the applicant
or borrower for the sum of $2,000.
“(f) Higher-risk Mortgage Defined.–For purposes of this section,
the term `higher-risk mortgage’ means a residential mortgage loan, other
than a reverse mortgage loan that is a qualified mortgage, as defined in
section 129C, secured by a principal dwelling–

[[Page 124 STAT. 2187]]

“(1) that is not a qualified mortgage, as defined in
section 129C; and
“(2) with an annual percentage rate that exceeds the
average prime offer rate for a comparable transaction, as
defined in section 129C, as of the date the interest rate is
set–
“(A) by 1.5 or more percentage points, in the case
of a first lien residential mortgage loan having an
original principal obligation amount that does not
exceed the amount of the maximum limitation on the
original principal obligation of mortgage in effect for
a residence of the applicable size, as of the date of
such interest rate set, pursuant to the sixth sentence
of section 305(a)(2) the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)(2));
“(B) by 2.5 or more percentage points, in the case
of a first lien residential mortgage loan having an
original principal obligation amount that exceeds the
amount of the maximum limitation on the original
principal obligation of mortgage in effect for a
residence of the applicable size, as of the date of such
interest rate set, pursuant to the sixth sentence of
section 305(a)(2) the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)(2)); and
“(C) by 3.5 or more percentage points for a
subordinate lien residential mortgage loan.”.

SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.

(a) In General.–Chapter 2 of the Truth in Lending Act (15 U.S.C.
1631 et seq.) is amended by inserting after section 129D (as added by
section 1461(a)) the following new section:
“Sec. 129E. <<NOTE: 15 USC 1639e.>> Appraisal independence
requirements

“(a) In General.–It shall be unlawful, in extending credit or in
providing any services for a consumer credit transaction secured by the
principal dwelling of the consumer, to engage in any act or practice
that violates appraisal independence as described in or pursuant to
regulations prescribed under this section.
“(b) Appraisal Independence.–For purposes of subsection (a), acts
or practices that violate appraisal independence shall include–
“(1) any appraisal of a property offered as security for
repayment of the consumer credit transaction that is conducted
in connection with such transaction in which a person with an
interest in the underlying transaction compensates, coerces,
extorts, colludes, instructs, induces, bribes, or intimidates a
person, appraisal management company, firm, or other entity
conducting or involved in an appraisal, or attempts, to
compensate, coerce, extort, collude, instruct, induce, bribe, or
intimidate such a person, for the purpose of causing the
appraised value assigned, under the appraisal, to the property
to be based on any factor other than the independent judgment of
the appraiser;
“(2) mischaracterizing, or suborning any
mischaracterization of, the appraised value of the property
securing the extension of the credit;
“(3) seeking to influence an appraiser or otherwise to
encourage a targeted value in order to facilitate the making or
pricing of the transaction; and

[[Page 124 STAT. 2188]]

“(4) withholding or threatening to withhold timely payment
for an appraisal report or for appraisal services rendered when
the appraisal report or services are provided for in accordance
with the contract between the parties.

“(c) Exceptions.–The requirements of subsection (b) shall not be
construed as prohibiting a mortgage lender, mortgage broker, mortgage
banker, real estate broker, appraisal management company, employee of an
appraisal management company, consumer, or any other person with an
interest in a real estate transaction from asking an appraiser to
undertake 1 or more of the following:
“(1) Consider additional, appropriate property information,
including the consideration of additional comparable properties
to make or support an appraisal.
“(2) Provide further detail, substantiation, or explanation
for the appraiser’s value conclusion.
“(3) Correct errors in the appraisal report.

“(d) Prohibitions on Conflicts of Interest.–No certified or
licensed appraiser conducting, and no appraisal management company
procuring or facilitating, an appraisal in connection with a consumer
credit transaction secured by the principal dwelling of a consumer may
have a direct or indirect interest, financial or otherwise, in the
property or transaction involving the appraisal.
“(e) Mandatory Reporting.–Any mortgage lender, mortgage broker,
mortgage banker, real estate broker, appraisal management company,
employee of an appraisal management company, or any other person
involved in a real estate transaction involving an appraisal in
connection with a consumer credit transaction secured by the principal
dwelling of a consumer who has a reasonable basis to believe an
appraiser is failing to comply with the Uniform Standards of
Professional Appraisal Practice, is violating applicable laws, or is
otherwise engaging in unethical or unprofessional conduct, shall refer
the matter to the applicable State appraiser certifying and licensing
agency.
“(f) No Extension of Credit.–In connection with a consumer credit
transaction secured by a consumer’s principal dwelling, a creditor who
knows, at or before loan consummation, of a violation of the appraisal
independence standards established in subsections (b) or (d) shall not
extend credit based on such appraisal unless the creditor documents that
the creditor has acted with reasonable diligence to determine that the
appraisal does not materially misstate or misrepresent the value of such
dwelling.
“(g) Rules and Interpretive Guidelines.–
“(1) In general.–Except as provided under paragraph (2),
the Board, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau may
jointly issue rules, interpretive guidelines, and general
statements of policy with respect to acts or practices that
violate appraisal independence in the provision of mortgage
lending services for a consumer credit transaction secured by
the principal dwelling of the consumer and mortgage brokerage
services for such a transaction, within the meaning of
subsections (a), (b), (c), (d), (e), (f), (h), and (i).
“(2) Interim final regulations.– <<NOTE: Deadline.>> The
Board shall, for purposes of this section, prescribe interim
final regulations no later than 90 days after the date of
enactment of this section defining with specificity acts or
practices that violate

[[Page 124 STAT. 2189]]

appraisal independence in the provision of mortgage lending
services for a consumer credit transaction secured by the
principal dwelling of the consumer or mortgage brokerage
services for such a transaction and defining any terms in this
section or such regulations. Rules prescribed by the Board under
this paragraph shall be deemed to be rules prescribed by the
agencies jointly under paragraph (1).

“(h) Appraisal Report Portability.–Consistent with the
requirements of this section, the Board, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the National Credit
Union Administration Board, the Federal Housing Finance Agency, and the
Bureau may jointly issue regulations that address the issue of appraisal
report portability, including regulations that ensure the portability of
the appraisal report between lenders for a consumer credit transaction
secured by a 1-4 unit single family residence that is the principal
dwelling of the consumer, or mortgage brokerage services for such a
transaction.
“(i) Customary and Reasonable Fee.–
“(1) In general.–Lenders and their agents shall compensate
fee appraisers at a rate that is customary and reasonable for
appraisal services performed in the market area of the property
being appraised. Evidence for such fees may be established by
objective third-party information, such as government agency fee
schedules, academic studies, and independent private sector
surveys. Fee studies shall exclude assignments ordered by known
appraisal management companies.
“(2) Fee appraiser definition.–For purposes of this
section, the term `fee appraiser’ means a person who is not an
employee of the mortgage loan originator or appraisal management
company engaging the appraiser and is–
“(A) a State licensed or certified appraiser who
receives a fee for performing an appraisal and certifies
that the appraisal has been prepared in accordance with
the Uniform Standards of Professional Appraisal
Practice; or
“(B) a company not subject to the requirements of
section 1124 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et
seq.) that utilizes the services of State licensed or
certified appraisers and receives a fee for performing
appraisals in accordance with the Uniform Standards of
Professional Appraisal Practice.
“(3) Exception for complex assignments.–In the case of an
appraisal involving a complex assignment, the customary and
reasonable fee may reflect the increased time, difficulty, and
scope of the work required for such an appraisal and include an
amount over and above the customary and reasonable fee for non-
complex assignments.

“(j) Sunset.–Effective on the date the interim final regulations
are promulgated pursuant to subsection (g), the Home Valuation Code of
Conduct announced by the Federal Housing Finance Agency on December 23,
2008, shall have no force or effect.
“(k) Penalties.–
“(1) First violation.–In addition to the enforcement
provisions referred to in section 130, each person who violates
this section shall forfeit and pay a civil penalty of not more
than $10,000 for each day any such violation continues.

[[Page 124 STAT. 2190]]

“(2) Subsequent violations.– <<NOTE: Applicability.>> In
the case of any person on whom a civil penalty has been imposed
under paragraph (1), paragraph (1) shall be applied by
substituting `$20,000′ for `$10,000′ with respect to all
subsequent violations.
“(3) Assessment.–The agency referred to in subsection (a)
or (c) of section 108 with respect to any person described in
paragraph (1) shall assess any penalty under this subsection to
which such person is subject.”.

(b) Clerical Amendment.–The table of sections for chapter 2 of the
Truth in Lending Act is amended by inserting after the item relating to
section 129D (as added by section 1461(c)) the following new items:

“129E. Appraisal independence requirements.
“129F. Requirements for prompt crediting of home loan payments.
“129G. Requests for payoff amounts of home loan.
“129H. Property appraisal requirements.”.

(c) Deference.–Section 105 of the Truth in Lending Act (15 U.S.C.
1604) is amended by adding at the end the following:
“(h) Deference.– <<NOTE: Applicability.>> Notwithstanding any
power granted to any Federal agency under this title, the deference that
a court affords to the Bureau with respect to a determination made by
the Bureau relating to the meaning or interpretation of any provision of
this title, other than section 129E or 129H, shall be applied as if the
Bureau were the only agency authorized to apply, enforce, interpret, or
administer the provisions of this title.”.

(d) Conforming Amendments in Title X Not Applicable to Sections 129E
and 129H.–Notwithstanding section 1099A, the term “Board” in sections
129E and 129H, as added by this subtitle, shall not be substituted by
the term “Bureau”.
SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FFIEC,
APPRAISER INDEPENDENCE MONITORING,
APPROVED APPRAISER EDUCATION, APPRAISAL
MANAGEMENT COMPANIES, APPRAISER
COMPLAINT HOTLINE, AUTOMATED VALUATION
MODELS, AND BROKER PRICE OPINIONS.

(a) Threshold Levels.–Section 1112(b) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is
amended by inserting before the period the following: “, and receives
concurrence from the Bureau of Consumer Financial Protection that such
threshold level provides reasonable protection for consumers who
purchase 1-4 unit single-family residences”.
(b) Annual Report of Appraisal Subcommittee.–Section 1103(a) of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3332(a)) is amended at the end by inserting the following new
paragraph:
“(5) transmit an annual report to the Congress not later
than June 15 of each year that describes the manner in which
each function assigned to the Appraisal Subcommittee has been
carried out during the preceding year. The report shall also
detail the activities of the Appraisal Subcommittee, including
the results of all audits of State appraiser regulatory
agencies, and provide an accounting of disapproved actions and
warnings taken in the previous year, including a description of
the conditions causing the disapproval and actions taken to
achieve compliance.”.

[[Page 124 STAT. 2191]]

(c) Open Meetings.–Section 1104(b) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is
amended–
(1) by inserting “in public session after notice in the
Federal Register, but may close certain portions of these
meetings related to personnel and review of preliminary State
audit reports,” after “shall meet”; and
(2) by adding after the final period the following: “The
subject matter discussed in any closed or executive session
shall be described in the Federal Register notice of the
meeting.”.

(d) Regulations.–Section 1106 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is amended–
(1) by inserting “prescribe regulations in accordance with
chapter 5 of title 5, United States Code (commonly referred to
as the Administrative Procedures Act) after notice and
opportunity for comment,” after “hold hearings”; and
(2) at the end by inserting “Any regulations prescribed by
the Appraisal Subcommittee shall (unless otherwise provided in
this title) be limited to the following functions: temporary
practice, national registry, information sharing, and
enforcement. <<NOTE: Establishment.>>  For purposes of
prescribing regulations, the Appraisal Subcommittee shall
establish an advisory committee of industry participants,
including appraisers, lenders, consumer advocates, real estate
agents, and government agencies, and hold meetings as necessary
to support the development of regulations.”.

(e) Appraisal Reviews and Complex Appraisals.–
(1) Section 1110.–Section 1110 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3339) is amended–
(A) in paragraph (1), by striking “and”;
(B) in paragraph (2), by striking the period at the
end and inserting “; and”; and
(C) by inserting after paragraph (2) the following:
“(3) that such appraisals shall be subject to appropriate
review for compliance with the Uniform Standards of Professional
Appraisal Practice.”.
(2) Section 1113.–Section 1113 of the Financial
Institutions and Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 3342) is amended by inserting before the period the
following: <<NOTE: Definition.>>  “, where a complex 1-to-4
unit single family residential appraisal means an appraisal for
which the property to be appraised, the form of ownership, the
property characteristics, or the market conditions are
atypical”.

(f) Appraisal Management Services.–
(1) Supervision of third party providers of appraisal
management services.–Section 1103(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3332(a)) (as previously amended by this section) is
amended–
(A) by amending paragraph (1) to read as follows:
“(1) monitor the requirements established by States–
“(A) for the certification and licensing of
individuals who are qualified to perform appraisals in
connection with federally related transactions,
including a code of professional responsibility; and

[[Page 124 STAT. 2192]]

“(B) for the registration and supervision of the
operations and activities of an appraisal management
company;”; and
(B) by adding at the end the following new
paragraph:
“(6) maintain a national registry of appraisal management
companies that either are registered with and subject to
supervision of a State appraiser certifying and licensing agency
or are operating subsidiaries of a Federally regulated financial
institution.”.
(2) Appraisal management company minimum requirements.–
Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is amended by
adding at the end the following new section (and amending the
table of contents accordingly):
“SEC. 1124. <<NOTE: 12 USC 3353.>> APPRAISAL MANAGEMENT COMPANY
MINIMUM REQUIREMENTS.

“(a) In General.–
<<NOTE: Regulations. Applicability. States.>> The Board of Governors of
the Federal Reserve System, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau of Consumer
Financial Protection shall jointly, by rule, establish minimum
requirements to be applied by a State in the registration of appraisal
management companies. Such requirements shall include a requirement that
such companies–
“(1) register with and be subject to supervision by a State
appraiser certifying and licensing agency in each State in which
such company operates;
“(2) verify that only licensed or certified appraisers are
used for federally related transactions;
“(3) require that appraisals coordinated by an appraisal
management company comply with the Uniform Standards of
Professional Appraisal Practice; and
“(4) require that appraisals are conducted independently
and free from inappropriate influence and coercion pursuant to
the appraisal independence standards established under section
129E of the Truth in Lending Act.

“(b) Relation to State Law.–Nothing in this section shall be
construed to prevent States from establishing requirements in addition
to any rules promulgated under subsection (a).
“(c) Federally Regulated Financial Institutions.–
<<NOTE: Applicability.>> The requirements of subsection (a) shall apply
to an appraisal management company that is a subsidiary owned and
controlled by a financial institution and regulated by a Federal
financial institution regulatory agency. An appraisal management company
that is a subsidiary owned and controlled by a financial institution
regulated by a Federal financial institution regulatory agency shall not
be required to register with a State.

“(d) Registration Limitations.–An appraisal management company
shall not be registered by a State or included on the national registry
if such company, in whole or in part, directly or indirectly, is owned
by any person who has had an appraiser license or certificate refused,
denied, cancelled, surrendered in lieu of revocation, or revoked in any
State. <<NOTE: Investigation.>>  Additionally, each person that owns
more than 10 percent of an appraisal management company shall be of good
moral character, as determined by the State appraiser certifying and
licensing agency, and shall submit to a

[[Page 124 STAT. 2193]]

background investigation carried out by the State appraiser certifying
and licensing agency.

“(e) Reporting.– <<NOTE: Regulations.>> The Board of Governors of
the Federal Reserve System, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau of Consumer
Financial Protection shall jointly promulgate regulations for the
reporting of the activities of appraisal management companies to the
Appraisal Subcommittee in determining the payment of the annual registry
fee.

“(f) Effective Date.–
“(1) In general.–No appraisal management company may
perform services related to a federally related transaction in a
State after the date that is 36 months after the date on which
the regulations required to be prescribed under subsection (a)
are prescribed in final form unless such company is registered
with such State or subject to oversight by a Federal financial
institutions regulatory agency.
“(2) Extension of effective date.–Subject to the approval
of the Council, the Appraisal Subcommittee may extend by an
additional 12 months the requirements for the registration and
supervision of appraisal management companies if it makes a
written finding that a State has made substantial progress in
establishing a State appraisal management company registration
and supervision system that appears to conform with the
provisions of this title.”.
(3) State appraiser certifying and licensing agency
authority.–Section 1117 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is
amended by adding at the end the following: “The duties of such
agency may additionally include the registration and supervision
of appraisal management companies and the addition of
information about the appraisal management company to the
national registry.”.
(4) Appraisal management company definition.–Section 1121
of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 3350) is amended by adding at the end the
following:
“(11) Appraisal management company.–The term `appraisal
management company’ means, in connection with valuing properties
collateralizing mortgage loans or mortgages incorporated into a
securitization, any external third party authorized either by a
creditor of a consumer credit transaction secured by a
consumer’s principal dwelling or by an underwriter of or other
principal in the secondary mortgage markets, that oversees a
network or panel of more than 15 certified or licensed
appraisers in a State or 25 or more nationally within a given
year–
“(A) to recruit, select, and retain appraisers;
“(B) to contract with licensed and certified
appraisers to perform appraisal assignments;
“(C) to manage the process of having an appraisal
performed, including providing administrative duties
such as receiving appraisal orders and appraisal
reports, submitting completed appraisal reports to
creditors and underwriters, collecting fees from
creditors and underwriters for

[[Page 124 STAT. 2194]]

services provided, and reimbursing appraisers for
services performed; or
“(D) to review and verify the work of
appraisers.”.

(g) State Agency Reporting Requirement.–Section 1109(a) of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3338(a)) is amended–
(1) by striking “and” after the semicolon in paragraph
(1);
(2) by redesignating paragraph (2) as paragraph (4); and
(3) by inserting after paragraph (1) the following new
paragraphs:
“(2) transmit reports on the issuance and renewal of
licenses and certifications, sanctions, disciplinary actions,
license and certification revocations, and license and
certification suspensions on a timely basis to the national
registry of the Appraisal Subcommittee;
“(3) transmit reports on a timely basis of supervisory
activities involving appraisal management companies or other
third-party providers of appraisals and appraisal management
services, including investigations initiated and disciplinary
actions taken; and”.

(h) Registry Fees Modified.–
(1) In general.–Section 1109(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3338(a)) is amended–
(A) by amending paragraph (4) (as modified by
section 1473(g)) to read as follows:
“(4) collect–
“(A) from such individuals who perform or seek to
perform appraisals in federally related transactions, an
annual registry fee of not more than $40, such fees to
be transmitted by the State agencies to the Council on
an annual basis; and
“(B) from an appraisal management company that
either has registered with a State appraiser certifying
and licensing agency in accordance with this title or
operates as a subsidiary of a federally regulated
financial institution, an annual registry fee of–
“(i) in the case of such a company that has
been in existence for more than a year, $25
multiplied by the number of appraisers working for
or contracting with such company in such State
during the previous year, but where such $25
amount may be adjusted, up to a maximum of $50, at
the discretion of the Appraisal Subcommittee, if
necessary to carry out the Subcommittee’s
functions under this title; and
“(ii) in the case of such a company that has
not been in existence for more than a year, $25
multiplied by an appropriate number to be
determined by the Appraisal Subcommittee, and
where such number will be used for determining the
fee of all such companies that were not in
existence for more than a year, but where such $25
amount may be adjusted, up to a maximum of $50, at
the discretion of the Appraisal Subcommittee, if
necessary to carry out the Subcommittee’s
functions under this title.”; and

[[Page 124 STAT. 2195]]

(B) by amending the matter following paragraph (4),
as redesignated, to read as follows:

“Subject to the approval of the Council, the Appraisal Subcommittee may
adjust the dollar amount of registry fees under paragraph (4)(A), up to
a maximum of $80 per annum, as necessary to carry out its functions
under this title. <<NOTE: Deadline.>>  The Appraisal Subcommittee shall
consider at least once every 5 years whether to adjust the dollar amount
of the registry fees to account for inflation. In implementing any
change in registry fees, the Appraisal Subcommittee shall provide
flexibility to the States for multi-year certifications and licenses
already in place, as well as a transition period to implement the
changes in registry fees. In establishing the amount of the annual
registry fee for an appraisal management company, the Appraisal
Subcommittee shall have the discretion to impose a minimum annual
registry fee for an appraisal management company to protect against the
under reporting of the number of appraisers working for or contracted by
the appraisal management company.”.
(2) Incremental revenues.–Incremental revenues collected
pursuant to the increases required by this subsection shall be
placed in a separate account at the United States Treasury,
entitled the “Appraisal Subcommittee Account”.

(i) <<NOTE: 12 USC 3338 note.>>  Grants and Reports.–Section
1109(b) of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 3338(b)) is amended–
(1) by striking “and” after the semicolon in paragraph
(3);
(2) by striking the period at the end of paragraph (4) and
inserting a semicolon;
(3) by adding at the end the following new paragraphs:
“(5) to make grants to State appraiser certifying and
licensing agencies, in accordance with policies to be developed
by the Appraisal Subcommittee, to support the efforts of such
agencies to comply with this title, including–
“(A) the complaint process, complaint
investigations, and appraiser enforcement activities of
such agencies; and
“(B) the submission of data on State licensed and
certified appraisers and appraisal management companies
to the National appraisal registry, including
information affirming that the appraiser or appraisal
management company meets the required qualification
criteria and formal and informal disciplinary actions;
and
“(6) to report to all State appraiser certifying and
licensing agencies when a license or certification is
surrendered, revoked, or suspended.”.

Obligations authorized under this subsection may not exceed 75 percent
of the fiscal year total of incremental increase in fees collected and
deposited in the “Appraisal Subcommittee Account” pursuant to
subsection (h).
(j) Criteria.–Section 1116 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is amended–
(1) in subsection (c), by inserting “whose criteria for the
licensing of a real estate appraiser currently meet or exceed
the minimum criteria issued by the Appraisal Qualifications
Board of The Appraisal Foundation for the licensing of real
estate appraisers” before the period at the end; and

[[Page 124 STAT. 2196]]

(2) by striking subsection (e) and inserting the following
new subsection:

“(e) Minimum Qualification Requirements.–Any requirements
established for individuals in the position of `Trainee Appraiser’ and
`Supervisory Appraiser’ shall meet or exceed the minimum qualification
requirements of the Appraiser Qualifications Board of The Appraisal
Foundation. The Appraisal Subcommittee shall have the authority to
enforce these requirements.”.
(k) Monitoring of State Appraiser Certifying and Licensing
Agencies.–Section 1118 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 3347) is amended–
(1) by amending subsection (a) to read as follows:

“(a) In General.–The Appraisal Subcommittee shall monitor each
State appraiser certifying and licensing agency for the purposes of
determining whether such agency–
“(1) has policies, practices, funding, staffing, and
procedures that are consistent with this title;
“(2) processes complaints and completes investigations in a
reasonable time period;
“(3) appropriately disciplines sanctioned appraisers and
appraisal management companies;
“(4) maintains an effective regulatory program; and
“(5) reports complaints and disciplinary actions on a
timely basis to the national registries on appraisers and
appraisal management companies maintained by the Appraisal
Subcommittee.

The Appraisal Subcommittee shall have the authority to remove a State
licensed or certified appraiser or a registered appraisal management
company from a national registry on an interim basis, not to exceed 90
days, pending State agency action on licensing, certification,
registration, and disciplinary proceedings. The Appraisal Subcommittee
and all agencies, instrumentalities, and Federally recognized entities
under this title shall not recognize appraiser certifications and
licenses from States whose appraisal policies, practices, funding,
staffing, or procedures are found to be inconsistent with this title.
The Appraisal Subcommittee shall have the authority to impose sanctions,
as described in this section, against a State agency that fails to have
an effective appraiser regulatory program. In determining whether such a
program is effective, the Appraisal Subcommittee shall include an
analysis of the licensing and certification of appraisers, the
registration of appraisal management companies, the issuance of
temporary licenses and certifications for appraisers, the receiving and
tracking of submitted complaints against appraisers and appraisal
management companies, the investigation of complaints, and enforcement
actions against appraisers and appraisal management companies. The
Appraisal Subcommittee shall have the authority to impose interim
actions and suspensions against a State agency as an alternative to, or
in advance of, the derecognition of a State agency.”.
(2) in subsection (b)(2), by inserting after “authority”
the following: “or sufficient funding”.

(l) Reciprocity.–Subsection (b) of section 1122 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3351(b)) is amended to read as follows:
“(b) Reciprocity.–Notwithstanding any other provisions of this
title, a federally related transaction shall not be appraised

[[Page 124 STAT. 2197]]

by a certified or licensed appraiser unless the State appraiser
certifying or licensing agency of the State certifying or licensing such
appraiser has in place a policy of issuing a reciprocal certification or
license for an individual from another State when–
“(1) the appraiser licensing and certification program of
such other State is in compliance with the provisions of this
title; and
“(2) the appraiser holds a valid certification from a State
whose requirements for certification or licensing meet or exceed
the licensure standards established by the State where an
individual seeks appraisal licensure.”.

(m) Consideration of Professional Appraisal Designations.–Section
1122(d) of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 3351(d)) is amended by striking “shall not
exclude” and all that follows through the end of the subsection and
inserting the following: “may include education achieved, experience,
sample appraisals, and references from prior clients. Membership in a
nationally recognized professional appraisal organization may be a
criteria considered, though lack of membership therein shall not be the
sole bar against consideration for an assignment under these
criteria.”.
(n) Appraiser Independence.–Section 1122 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3351) is amended by adding at the end the following new subsection:
“(g) Appraiser Independence Monitoring.–The Appraisal Subcommittee
shall monitor each State appraiser certifying and licensing agency for
the purpose of determining whether such agency’s policies, practices,
and procedures are consistent with the purposes of maintaining appraiser
independence and whether such State has adopted and maintains effective
laws, regulations, and policies aimed at maintaining appraiser
independence.”.
(o) Appraiser Education.–Section 1122 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is
amended by inserting after subsection (g) (as added by subsection (l) of
this section) the following new subsection:
“(h) Approved Education.–The Appraisal Subcommittee shall
encourage the States to accept courses approved by the Appraiser
Qualification Board’s Course Approval Program.”.
(p) Appraisal Complaint Hotline.–Section 1122 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3351), as amended by this section, is amended by adding at the end the
following new subsection:
“(i) Appraisal Complaint National Hotline.–
<<NOTE: Deadline. Determination.>> If, 6 months after the date of the
enactment of this subsection, the Appraisal Subcommittee determines that
no national hotline exists to receive complaints of non-compliance with
appraisal independence standards and Uniform Standards of Professional
Appraisal Practice, including complaints from appraisers, individuals,
or other entities concerning the improper influencing or attempted
improper influencing of appraisers or the appraisal process, the
Appraisal Subcommittee shall establish and operate such a national
hotline, which shall include a toll-free telephone number and an email
address. If the Appraisal Subcommittee operates such a national hotline,
the Appraisal Subcommittee shall refer complaints for further action to
appropriate governmental bodies, including a State appraiser certifying
and licensing agency, a financial institution regulator,

[[Page 124 STAT. 2198]]

or other appropriate legal authorities. For complaints referred to State
appraiser certifying and licensing agencies or to Federal regulators,
the Appraisal Subcommittee shall have the authority to follow up such
complaint referrals in order to determine the status of the resolution
of the complaint.”.

(q) Automated Valuation Models.–Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3331 et seq.), as amended by this section, is amended by adding at the
end the following new section (and amending the table of contents
accordingly):
“SEC. 1125. <<NOTE: 12 USC 3354.>> AUTOMATED VALUATION MODELS
USED TO ESTIMATE COLLATERAL VALUE FOR
MORTGAGE LENDING PURPOSES.

“(a) In General.–Automated valuation models shall adhere to
quality control standards designed to–
“(1) ensure a high level of confidence in the estimates
produced by automated valuation models;
“(2) protect against the manipulation of data;
“(3) seek to avoid conflicts of interest;
“(4) require random sample testing and reviews; and
“(5) account for any other such factor that the agencies
listed in subsection (b) determine to be appropriate.

“(b) Adoption of Regulations.–The Board, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the National Credit
Union Administration Board, the Federal Housing Finance Agency, and the
Bureau of Consumer Financial Protection, in consultation with the staff
of the Appraisal Subcommittee and the Appraisal Standards Board of the
Appraisal Foundation, shall promulgate regulations to implement the
quality control standards required under this section.
“(c) Enforcement.–Compliance with regulations issued under this
subsection shall be enforced by–
“(1) with respect to a financial institution, or subsidiary
owned and controlled by a financial institution and regulated by
a Federal financial institution regulatory agency, the Federal
financial institution regulatory agency that acts as the primary
Federal supervisor of such financial institution or subsidiary;
and
“(2) with respect to other participants in the market for
appraisals of 1-to-4 unit single family residential real estate,
the Federal Trade Commission, the Bureau of Consumer Financial
Protection, and a State attorney general.

“(d) Automated Valuation Model Defined.–For purposes of this
section, the term `automated valuation model’ means any computerized
model used by mortgage originators and secondary market issuers to
determine the collateral worth of a mortgage secured by a consumer’s
principal dwelling.”.
(r) Broker Price Opinions.–Title XI of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.),
as amended by this section, is amended by adding at the end the
following new section (and amending the table of contents accordingly):
“SEC. 1126. <<NOTE: 12 USC 3355.>> BROKER PRICE OPINIONS.

“(a) General Prohibition.–In conjunction with the purchase of a
consumer’s principal dwelling, broker price opinions may not be used as
the primary basis to determine the value of a piece

[[Page 124 STAT. 2199]]

of property for the purpose of a loan origination of a residential
mortgage loan secured by such piece of property.
“(b) Broker Price Opinion Defined.–For purposes of this section,
the term `broker price opinion’ means an estimate prepared by a real
estate broker, agent, or sales person that details the probable selling
price of a particular piece of real estate property and provides a
varying level of detail about the property’s condition, market, and
neighborhood, and information on comparable sales, but does not include
an automated valuation model, as defined in section 1125(c).”.
(s) Amendments to Appraisal Subcommittee.–Section 1011 of the
Federal Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3310) is amended–
(1) in the first sentence, by adding before the period the
following: “, the Bureau of Consumer Financial Protection, and
the Federal Housing Finance Agency”; and
(2) by inserting at the end the following: “At all times at
least one member of the Appraisal Subcommittee shall have
demonstrated knowledge and competence through licensure,
certification, or professional designation within the appraisal
profession.”.

(t) Technical Corrections.–
(1) Section 1119(a)(2) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(a)(2)) is
amended by striking “council,” and inserting “Council,”.
(2) Section 1121(6) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is
amended by striking “Corporations,” and inserting
“Corporation,”.
(3) Section 1121(8) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is
amended by striking “council” and inserting “Council”.
(4) Section 1122 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is
amended–
(A) in subsection (a)(1) by moving the left margin
of subparagraphs (A), (B), and (C) 2 ems to the right;
and
(B) in subsection (c)–
(i) by striking “Federal Financial
Institutions Examination Council” and inserting
“Financial Institutions Examination Council”;
and
(ii) by striking “the council’s functions”
and inserting “the Council’s functions”.
SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

Subsection (e) of section 701 of the Equal Credit Opportunity Act
(15 U.S.C. 1691) is amended to read as follows:
“(e) Copies Furnished to Applicants.–
“(1) In general.– <<NOTE: Deadline.>> Each creditor shall
furnish to an applicant a copy of any and all written appraisals
and valuations developed in connection with the applicant’s
application for a loan that is secured or would have been
secured by a first lien on a dwelling promptly upon completion,
but in no case later than 3 days prior to the closing of the
loan, whether the creditor grants or denies the applicant’s
request for credit or the application is incomplete or
withdrawn.

[[Page 124 STAT. 2200]]

“(2) Waiver.–The applicant may waive the 3 day requirement
provided for in paragraph (1), except where otherwise required
in law.
“(3) Reimbursement.–The applicant may be required to pay a
reasonable fee to reimburse the creditor for the cost of the
appraisal, except where otherwise required in law.
“(4) Free copy.–Notwithstanding paragraph (3), the
creditor shall provide a copy of each written appraisal or
valuation at no additional cost to the applicant.
“(5) Notification to applicants.–At the time of
application, the creditor shall notify an applicant in writing
of the right to receive a copy of each written appraisal and
valuation under this subsection.
“(6) Valuation defined.–For purposes of this subsection,
the term `valuation’ shall include any estimate of the value of
a dwelling developed in connection with a creditor’s decision to
provide credit, including those values developed pursuant to a
policy of a government sponsored enterprise or by an automated
valuation model, a broker price opinion, or other methodology or
mechanism.”.
SEC. 1475. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT
RELATING TO CERTAIN APPRAISAL FEES.

Section 4 of the Real Estate Settlement Procedures Act of
1974 <<NOTE: 12 USC 2603.>> is amended by adding at the end the
following new subsection:

“(c) The standard form described in subsection (a) may include, in
the case of an appraisal coordinated by an appraisal management company
(as such term is defined in section 1121(11) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3350(11))), a clear disclosure of–
“(1) the fee paid directly to the appraiser by such
company; and
“(2) the administration fee charged by such company.”.
SEC. 1476. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS
APPRAISAL METHODS, VALUATION MODELS AND
DISTRIBUTIONS CHANNELS, AND ON THE HOME
VALUATION CODE OF CONDUCT AND THE
APPRAISAL SUBCOMMITTEE.

(a) In General.–The Government Accountability Office shall conduct
a study on–
(1) the effectiveness and impact of–
(A) appraisal methods, including the cost approach,
the comparative sales approach, the income approach, and
others that may be available;
(B) appraisal valuation models, including licensed
and certified appraisals, broker-priced opinions, and
automated valuation models; and
(C) appraisal distribution channels, including
appraisal management companies, independent appraisal
operations within mortgage originators, and fee-for-
service appraisers;
(2) the Home Valuation Code of Conduct; and
(3) the Appraisal Subcommittee’s functions pursuant to title
XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.

(b) Study.–Not later than–
(1) <<NOTE: Deadline.>> 12 months after the date of
enactment of this Act, the Government Accountability Office
shall submit a study

[[Page 124 STAT. 2201]]

to the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives; and
(2) <<NOTE: Deadline. Reports.>> 90 days after the date of
enactment of this Act, the Government Accountability Office
shall provide a report on the status of the study and any
preliminary findings to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives.

(c) Content of Study.–The study required by this section shall
include an examination of the following:
(1) Appraisal approaches, valuation models, and distribution
channels.–
(A) The prevalence, alone or in combination, of
certain appraisal approaches, models, and channels in
purchase-money and refinance mortgage transactions.
(B) The accuracy of these approaches, models, and
channels in assessing the property as collateral.
(C) Whether and how these approaches, models, and
channels contributed to price speculation during the
previous cycle.
(D) The costs to consumers of these approaches,
models, and channels.
(E) The disclosure of fees to consumers in the
appraisal process.
(F) To what extent the usage of these approaches,
models, and channels may be influenced by a conflict of
interest between the mortgage lender and the appraiser
and the mechanism by which the lender selects and
compensates the appraiser.
(G) The suitability of these approaches, models, and
channels in rural versus urban areas.
(2) Home valuation code of conduct (hvcc).–
(A) How the HVCC affects mortgage lenders’ selection
of appraisers.
(B) How the HVCC affects State regulation of
appraisers and appraisal distribution channels.
(C) How the HVCC affects the quality and cost of
appraisals and the length of time to obtain an
appraisal.
(D) How the HVCC affects mortgage brokers, small
businesses, and consumers.

(d) Additional Study Required.–
(1) In general.– <<NOTE: Deadline.>> Not later than 18
months after the date of enactment of this Act, the Government
Accountability Office shall submit a study to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives.
(2) Content of additional study.–The study required under
paragraph (1) shall include–
(A) an examination of–
(i) the Appraisal Subcommittee’s ability to
monitor and enforce State and Federal
certification requirements and standards,
including by providing a summary with a
statistical breakdown of enforcement actions taken
during the last 10 years;

[[Page 124 STAT. 2202]]

(ii) whether existing Federal financial
institutions regulatory agency exemptions on
appraisals for federally related transactions
needs to be revised; and
(iii) whether new means of data collection,
such as the establishment of a national
repository, would benefit the Appraisal
Subcommittee’s ability to perform its functions;
and
(B) recommendations from this examination for
administrative and legislative action at the Federal and
State level.