[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Rules and Regulations]
[Pages 72306-72308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30266]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 200

[Docket No. FR-5458-F-02]
RIN 2502-AI96


Federal Housing Administration (FHA) Appraiser Roster: Appraiser 
Qualifications for Placement on the FHA Appraiser Roster

AGENCY: Office of the Assistant Secretary of Housing--Federal Housing 
Commissioner, HUD.

ACTION: Final rule.

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SUMMARY: On July 14, 2011, HUD published a proposed rule to update 
HUD's regulations to conform to the statutory requirement that 
appraisers must be certified, rather than licensed, by a state 
appraisal licensing board in order to appear on the FHA Appraiser 
Roster. This requirement was established by the Housing and Economic 
Recovery Act of 2008. Although current HUD practice is in compliance 
with the statutory mandate, the regulations reflect outdated prior 
policy of permitting state-licensed appraisers to be listed on the FHA 
Appraiser Roster. In addition, HUD proposed updating the FHA Appraiser 
Roster regulations by replacing the obsolete references to the Credit 
Alert Interactive Voice Response System (CAIVRS) with references to its 
successor, the online-based Credit Alert Verification Reporting System. 
This final rule follows the publication of the July 14, 2011, proposed 
rule. In this final rule, HUD is adopting the proposed rule without 
change. HUD did not receive any public comments on the proposed rule.

DATES: Effective Date: December 23, 2011.

FOR FURTHER INFORMATION CONTACT: Karin Hill, Director, Office of Single 
Family Program Development, Office of Housing, Department of Housing 
and Urban Development, 451 7th Street SW., Room 9278, Washington, DC 
20410-8000; telephone number (202) 708-2121 (this is not a toll-free 
number). Persons with hearing or speech impairments may access this 
number via TTY by calling the Federal Relay Service at 1 (800) 877-
8339.

SUPPLEMENTARY INFORMATION:

[[Page 72307]]

I. Background--The Proposed Rule

    On July 14, 2011, HUD published a proposed rule in the Federal 
Register (76 FR 41441) designed to make FHA's Appraiser Roster 
regulations regarding eligibility requirements of appraisers to qualify 
for placement and retention on the Appraiser Roster consistent with 
both the mandate of the Housing and Economic Recovery Act of 2008 (Pub. 
L. 110-289, approved July 30, 2008) (HERA) that all FHA-approved 
appraisers be state-certified and HUD's current policy regarding state-
certification of appraisers as set forth in Mortgagee Letter (ML) 2008-
39, published December 17, 2008.
    Under HUD's current regulation in 24 CFR 200.202(b), an applicant 
who wishes to be included on the FHA Appraiser Roster must, among other 
things, be a state-licensed or state-certified appraiser. Section 1404 
of the HERA amended section 202 of the National Housing Act (12 U.S.C. 
1708) to mandate that all appraisers chosen or approved to conduct 
appraisals of properties that will be security for FHA-insured 
mortgages must be ``certified'': (1) By the state in which the property 
to be appraised is located, or by a nationally recognized professional 
appraisal organization; and (2) have demonstrated verifiable education 
in the appraisal requirements established by FHA. Under amended section 
202(g) of the National Housing Act, licensed appraisers are no longer 
authorized to conduct appraisals of properties securing an FHA-insured 
mortgage.
    In order to comply with HERA's requirements governing who qualifies 
as an FHA-approved appraiser, and in order to implement this change in 
appraiser eligibility requirements in a manner that was not disruptive 
to the FHA mortgage lending process, ML 2008-39, issued by FHA on 
December 17, 2008, provided a deadline of October 1, 2009, for all FHA 
appraisers on the Appraisal Roster to become state-certified and 
indicated that FHA had ceased to accept applications by state-licensed 
appraisers on October 1, 2008, in order to comply with HERA.\1\
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    \1\ Copies of the mortgagee letters referenced in this final 
rule may be downloaded from http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/.
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    In addition, HERA provides that appraisers may either be state-
certified or certified by a ``nationally recognized professional 
appraisal organization'' in order to appear on the Roster. However, in 
the proposed rule, HUD stated that in order to prevent disruption and 
to ensure efficient processing of mortgage insurance, HUD will accept 
only state certification and not the certification of a ``nationally 
recognized professional appraisal organization.'' HUD determined that 
state certification sufficiently accomplishes the statutory purpose of 
ensuring higher quality appraisals.
    HUD took the opportunity in the proposed rule to propose the 
elimination references to the Credit Alert Interactive Voice Response 
System (CAIVRS). On July 11, 2008, HUD issued ML 2008-18, stating that 
HUD was discontinuing telephone access to CAIVRS because the hardware 
supporting the telephone access was obsolete and could no longer be 
repaired or maintained. Access to CAIVRS is now available solely 
through the Internet, and CAIVRS is now known as the Credit Alert 
Verification Reporting System, although the acronym remains the same.

II. This Final Rule

    This final rule follows publication of the July 14, 2011, proposed 
rule. The proposed rule provided for a 60-day public comment period. 
The public comment period for the proposed rule closed on September 12, 
2011, and HUD did not receive any public comments. Accordingly, HUD is 
adopting the proposed rule without change.
    In order to make the Appraiser Roster regulations consistent with 
current statute, this final rule removes all references to state 
licensing and state-licensed appraisers from the regulations in Sec.  
200.202 and Sec.  200.204. This final rule also eliminates the 
reference to the Credit Alert Interactive Voice Response System in 
Sec.  200.202. Because the Credit Alert Interactive Voice Response 
System no longer exists, the phrase has been replaced with ``Credit 
Alert Verification Reporting System,'' the new appraiser alert system 
put in place by ML 2008-18. Interested readers are referred to the 
preamble of the July 14, 2011, proposed rule, found at 76 FR 41441, for 
additional background information.

III. Findings and Certifications

Paperwork Reduction Act

    The information collection requirements for this rule have been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB 
control number 2502-0538. In accordance with the Paperwork Reduction 
Act, an agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information, unless the collection 
displays a currently valid OMB control number.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities.
    This final rule would not add any new regulatory burdens on FHA-
approved appraisers or applicants for FHA approval. HERA requires that 
an appraiser be state-certified to be approved by FHA to be on the 
Appraiser Roster. HUD ceased accepting applications from state-licensed 
appraisers on October 1, 2008, and all appraisers already on the 
Appraiser Roster must have become state-certified by October 1, 2009, 
to remain on the Appraiser Roster. This final rule will not create new 
costs for small entities of appraisers or of lenders, because the rule 
does not impose any new requirements on appraisers. In addition, FHA's 
Appraiser Roster pertains solely to individuals, not to entities. 
Individual appraisers must apply to be on the FHA Appraiser Roster. 
Therefore, the undersigned certifies that this rule will not have a 
significant impact on a substantial number of small entities.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This rule will not have federalism 
implications and would not impose substantial direct compliance costs 
on state and local governments or preempt state law within the meaning 
of the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
Tribal governments, and on the private sector. This rule does not 
impose any federal mandates on any state, local, or Tribal governments, 
or on the private sector, within the meaning of UMRA.

Environmental Impact

    This final rule does not direct, provide for assistance or loan and

[[Page 72308]]

mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule 
is categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).

Catalogue of Federal Domestic Assistance

    The Catalogue of Federal Domestic Assistance Number for the 
principal FHA single-family mortgage insurance program is 14.117.

List of Subjects in 24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Housing standards, Lead poisoning, Loan 
programs--housing and community development, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social Security, Unemployment 
compensation, Wages.

    Accordingly, for the reasons stated in the preamble, 24 CFR part 
200 is amended to read as follows:

PART 200--INTRODUCTION TO FHA PROGRAMS

0
1. The authority citation for part 200 continues to read as follows:

    Authority: 12 U.S.C. 1702-1715-z-21; 42 U.S.C. 3535(d).


0
2. In Sec.  200.202, revise paragraphs (b)(1) and (b)(2)(iii) as 
follows:


Sec.  200.202  How do I apply for placement on the Appraiser Roster?

* * * * *
    (b) * * *
    (1) You must be a state-certified appraiser with credentials that 
complied with the applicable certification criteria established by the 
Appraiser Qualification Board (AQB) of the Appraisal Foundation and in 
effect at the time the certification was awarded by the issuing 
jurisdiction; and
    (2) * * *
    (iii) HUD's Credit Alert Verification Reporting System.
0
3. In Sec.  200.204, revise paragraphs (a)(1)(ii), (c)(1) and (2) as 
follows:


Sec.  200.204  What actions may HUD take against unsatisfactory 
appraisers on the Appraiser Roster?

* * * * *
    (a) * * *
    (1) * * *
    (ii) Losing standing as a state-certified appraiser due to 
disciplinary action in any state in which the appraiser is certified;
* * * * *
    (c) * * *
    (1) Appraisers subject to state disciplinary action. An appraiser 
whose state certification in any state has been revoked, suspended, or 
surrendered as a result of a state disciplinary action is automatically 
suspended from the Appraiser Roster and prohibited from conducting FHA 
appraisals in any state until HUD receives evidence demonstrating that 
the state-imposed sanction has been lifted.
    (2) Expirations not due to state disciplinary action. An appraiser 
whose certification in a state has expired is automatically suspended 
from the Appraiser Roster in that state and may not conduct FHA 
appraisals in that state until HUD receives evidence that demonstrates 
renewal, but may continue to perform FHA appraisals in other states in 
which the appraiser is certified.
* * * * *

    Dated: November 16, 2011.
Carol J. Galante,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2011-30266 Filed 11-22-11; 8:45 am]
BILLING CODE 4210-67-P