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The GAO recommended changes in the federal review process for granting waivers from the requirement to obtain residential mortgage appraisals.
In a report prepared at the direction of the House Committee on Financial Services, the GAO reviewed appraisal exemptions to determine (i) if they increased risks for lenders and homebuyers, and (ii) if the statutorily created Appraisal Subcommittee ("ASC") - a subcommittee of the Federal Financial Institutions Examination Council- followed the required waiver review process when granting North Dakota a temporary waiver due to "significant delays" in the appraisal process and a "scarcity" of credentialed appraisers. As a result of its analysis of the statute and regulations, the GAO found that the exemptions did not increase overall risks for regulated lenders or for homebuyers. The GAO recommended, however, that the ASC explicitly define the terms "significant delay" and "scarcity" to create measurable standards for the waiver process moving forward.
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