Dodd-Frank Act (Appraisal Provisions)
The 2010 federal financial reform law that included significant appraisal provisions: appraiser independence requirements, AMC registration, customary and reasonable fee mandates, and prohibition of BPOs for origination.
Title XIV of the Dodd-Frank Wall Street Reform and Consumer Protection Act addressed several appraisal issues. It codified appraiser independence rules (preventing lenders and AMCs from pressuring appraisers to meet target values), required AMC registration in every state, mandated that AMCs pay customary and reasonable fees, required a second appraisal for certain higher-risk mortgages, and prohibited the use of BPOs for mortgage origination. These provisions fundamentally changed the relationship between lenders, AMCs, and appraisers.
Related Terms
Appraiser Independence
The legal requirement that appraisers must be free from improper influence, coercion, or pressure from parties with a financial interest in the transaction outcome.
Appraisal Management Company (AMC)
AMCA third-party company that manages the appraisal process on behalf of lenders, handling appraiser selection, order assignment, quality review, and delivery.
Customary and Reasonable Fees
The Dodd-Frank requirement that appraisers must be paid fees that are customary and reasonable for the market area and property type, regardless of whether they are engaged directly by a lender or through an AMC..
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)
FIRREAThe 1989 federal law that established the modern appraisal regulatory framework, requiring state licensing of appraisers and USPAP compliance for all federally related real estate transactions..
More in Legal & Regulatory
View allUniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
Competency Rule
A USPAP rule requiring that an appraiser must have the knowledge and experience necessary to complete an assignment competently, or must take steps to acquire it before accepting the assignment..
USPAP Ethics Rule
The USPAP rule establishing requirements for appraiser conduct, management, confidentiality, and record keeping.
The Appraisal Foundation
The Congressionally authorized organization that sets appraisal standards (USPAP) and minimum appraiser qualification criteria.