GAO: Appraisal Oversight Lacking
National Mortgage News made a GAO report its "Editors Choice" this week. Titled "HUD's Risk-Based Oversight of Appraisers Could Be Enhanced", the brief addresses some shortcomings of appraiser regulation.
"HUD's process for verifying that appraisers meet all relevant criteria when applying for placement on its roster lacks effective quality control.. it does not require the HOCs (home ownership center) to target for review appraisers who have been recently sanctioned. Because of this, we could not verify that the targeted appraisers were actually those that met HUD's criteria..HUD staff did not routinely visit properties to verify the work of contractors responsible for conducting field reviews."
Not that HUD isn't changing how it scrutinizes the appraisers. "According to HUD, the number of removal actions taken by the department has increased from 25 in 1998 to 132 in 2003, while the number of field reviews decreased from over 83,000 to 1,420." The report has a number of recommendations to "enhance oversight".