The goal of the amendment is to ensure an independent and competently performed appraisal process. It has been backed by the Appraisal Institute and has bipartisan support in Congress. However, the future of H.R. 5830 is uncertain. It authorizes the FHA to guarantee billions of dollars worth of refinanced loans if lenders reduce loan amounts to reflect reduced home values. The measure would require banks to make less money on the loans but it would also reduce their credit exposure, while helping families stay in their homes. According to the Appraisal Institute, discussions are underway in the Senate on companion legislation to H.R. 5830, where several other questions will likely be addressed at the committee level, including what property standards (FHA or conventional) will be applied to the appraisals and who will actually order the appraisal.
It would be naive to think that this legislation would eliminate all improper behavior. However, it is a step in the right direction even if it serves to draw attention to this serious problem.