Appraisal Organizations Support STOP Fraud Act

The Appraisal Institute and its partners have called for Congress to “consider and enact legislation designed to uphold integrity in the real estate valuation process while protecting government related financial interests and consumers.” The directive came in a letter in support of S. 1222, the STOP Fraud Act, introduced April 25 by Sens. Barack Obama, D-Ill., and Dick Durbin, D-Ill.

The Appraisal Institute, American Society of Appraisers, American Society of Farm Managers and Rural Appraisers and National Association of Independent Fee Appraisers stated in their letter that S. 1222 “addresses many of the concerns we have identified and have raised before Congress over the last several years.” These include improving the appraiser regulatory structure; providing federal and state appraiser regulatory bodies the resources and authority necessary to fulfill vital oversight of the profession; and promoting a case for professionalism to be fostered and encouraged.

The groups also called for “greater resources to be made available to law enforcement to conduct active and aggressive investigations and prosecutions of mortgage fraud, and that meaningful oversight of other real estate professionals is critical to protect safety and soundness of our financial markets and consumers.”

The legislation is aimed at stopping mortgage transactions that promote fraud, risk, abuse and underdevelopment. It would provide the first federal definition of mortgage fraud and authorize stiff criminal penalties against those who commit fraud. The bill would require a wide range of mortgage professionals to report suspected fraudulent activity, and give these same professionals safe harbor from liability when they report suspicious incidents. It also would authorize several grant programs to help state and local law enforcement entities fight fraud, provide the mortgage industry with updates on fraud trends, and further support the Departments of Treasury, Justice and Housing and Urban Development in their fraud-fighting efforts.