Banking regulators have put half of all home buyers at risk of fraud by caving in to bankers and easing federal appraisal requirements, a consumer group warned recently.

The Consumer Federation of America dismissed as "a myth" the bankers' argument that appraisal certification for smaller loans would drive up the cost of borrowing for low-and moderate-income homebuyers.

Regulatory agencies yielded last year to banking industry lobbying on that point.

Minimum Boosted to $100,000

They raised the threshold on the size of loan for which they would require an appraisal by a state-licensed professional to $100,000 from $50,000.

Appraisal certification was required by the 1989 thrift reform act.

"Low-income consumers are especially in need of reliable protection from fraud in real estate transactions and should have certification apply to them as well," a Consumer Federation research associate, Carla Feldpausch, said last week. She urged the regulatory agencies to reverse their decision.

A survey of 80 appraisal firms in 20 U.S. cities showed no correlation between certification and cost, she said.

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