The American Society of Appraisers (ASA) has sent a letter to Treasury Secretary Timothy Geithner urging the Obama administration to require that the market values of homes under the Homeowner Affordability and Stability Plan be determined by professional appraisers who are state certified and licensed.
In its letter, the group – which comprises the Appraisal Institute, American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, and National Association of Independent Fee Appraisers – cautions against the use of broker price opinions (BPOs) and automated valuation models (AVMs). The ASA says inclusion of BPOs in the administration's plan "could lead to widespread violations of state laws."
AVMs are unsuitable because they are not reliable in declining markets and in areas with diverse housing stock, the ASA says. Moreover, the group opposes reliance on national housing indices, claiming they fail to consider foreclosure or short sales in their calculations.
"Real estate appraisers can provide a range of services in a loan modification or refinance situations – including streamlined appraisals – under existing standards," Appraisal Institute Director of Government Affairs and External Relations Bill Garber wrote in the letter. "For a stable economy and secure mortgage finance system, valuations must be reliable, and those performing the appraisals must be accountable and professional."