Appraisal rule delayed a year.

Appraisal Rule Delayed a Year

Last week had ups and downs for real estate lenders, who won a reprieve from tougher appraisal requirements but lost a battle over environmental liability.

Congressional conferees hammering out bank legislation in Washington approved a one-year delay of licensing and certification requirements for appraisers that were due to take effect Jan. 1.

Bankers had already secured a six month delay in the appraiser-licensing rule, a provision of the 1989 thrift law imposed in reaction to failures in the thrift industry that have been linked to faulty appraisals.

They argued that more time is needed to implement state appraisal laws, and complained it will be difficult for banks to find licensed or certified appraisers, especially in rural areas, if the law takes effect as planned.

They have also argued that the requirements will create needless expense where loans for less than $100,000 are concerned.

Banks have said the lender liability rules in the so-called Super Fund Law potentially leave them open to claims far in excess of loan amounts, and that fear of liability is stifling credit.

A pending rule by the Environmental Protection Agency, which is intended to alleviate some of the lenders' fears on lender liability, took some of the steam out of efforts to pass a new law, said Lawrence P. Schnapf, environmental specialist with Lord Day & Lord, Barrett Smith.

But he said the rule may leave some questions, such as liability to third party lawsuits, open to interpretation.

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