Ask Henry

FIRREA Enforcement

Dear Henry,

As a federal statute, who or what government entity is charged with enforcement of the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA)? If an appraiser is aware of activity specifically prohibited by the statute, to whom should such activity be reported? It would seem nonsensical to have a federal law that was unenforceable by either the US Attorney General or the FTC or the EEOC. If you are unaware of a specific entity to approach, could you suggest a course of action in order to discover the appropriate party? Thanks for the favor of a reply and thanks for publishing my editorial response in your initial blog issue.

Peter von Nessi, CSA-G
Bronx, NY 10465

Dear Peter,

The way I remember it is that FIRREA established the government agency call the Appraisal Subcommittee. About the same time, the national appraisal organizations finally got motivated and established The Appraisal Foundation, which was given the mandate to write Appraisal Qualifications and Appraisal Standards for the profession. The Appraisal Foundation received financial aide from the Appraisal Subcommittee to accomplish these tasks. The actual task of licensing and certification of appraisers and the power to investigate complaints about appraisers was left up to the individual Appraisal Commissions that each state was required to establish. The duty of supervising these Commissions was left up to the Appraisal Subcommittee. It is their responsibility to see to it that the individual state Appraisal Commission carry out their duties. Therefore, if anyone had a complaint about an appraiser, it was supposed to be reported to their state's Appraisal Commission. If the problem were with a lending institution, it could be reported to the State Banking Commission or if a federal criminal offense were being committed, to the FBI.

Today, there is a big difference in the way these complaints are handled. In some states, little or nothing ever happens regarding follow up on complaints. In contrast, other states go overboard trying to enforce the regulations. Most states fall somewhere between these two positions. The best way to find the most effective avenue for getting your complaint dealt with seriously is to contact your state's real estate appraisal commission and ask for their advice.