The US House Financial Services Committee approved H.R. 5148 which would grant certain “high-risk” mortgages an exemption from having an appraisal performed in accordance with the Uniform Standards of Professional Appraisal Practice (“USPAP”).  USPAP – the Uniform Standards of Professional Appraisal Practice – is provided by the Appraisal Foundation and is described as “the generally accepted standards for professional appraisal practice in North America. USPAP contains standards for all types of appraisal services.”

Supporters of the bill, including the Appraisal Institute, argue that it could open up a range of valuation services and create flexibility for lenders to order an appraisal when the development and reporting requirements suit the needs of the assignment.  AI has stated that, “While Section 2 in the legislation would provide an exemption from evaluations in cases where the value of loans classified as ‘high-risk’ is below $250,000 and kept on the creditor’s balance sheet for at least three years, the number of loans that fit this criteria is expected to be very small. And despite the exemption . . .  many banks [are expected] to still obtain an appraisal because it’s good business practice.”