Mortgage bankers may be granted a financial favor that will eliminate high appraisal fees and the gift is coming from the unlikeliest of sources--the appraisers themselves.

The Appraisal Foundation's Appraisal Standards Board, a regulating agency, is set to vote on a draft document that will clarify rules allowing licensed and certified appraisers to trim the size of their examination reports on a case-by-case basis and, in some cases, eliminate the process.

The board recommended changes to the analysis reporting process, including a step away from complete appraisals by instituting two shorter versions of the report to suit the needs of the situation.

The approved draft is scheduled to be voted on in at the next standards board meeting in January. The board began accepting comments on the proposal Oct. 22.

"The issue is twofold for us," said Ritch LeGrand, chairman of the Appraisal Standards Board. "We wanted to react to the concerns of appraisal users who had concerns about difficulties in obtaining appraisals in a timely, cost-effective manner and whether some appraisals needed to be accomplished at all."

LeGrand said that, because of appraisers' varying interpretations of banking regulations, many believed they were required to submit all-encompassing appraisal reports that sometimes could be as large as 200 pages. The reports often tend to be time-consuming and, in many cases, its overkill, he said.

Even if the board approves the draft, its meaning to the mortgage banking community won't be clear until Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs decide whether to incorporate the new standards into their respective regulations and guidelines.

"Many appraisers did full reports as a matter of practice," said an Appraisal Foundation spokeswoman. "They believed that if they didn't, they'd be in violation of standards. In other cases, many bankers sought out unlicensed appraisers--we call them examiners--to do the appraisals because they didn't need as intensive a report as a licensed appraiser would give them and, because there was less work involved, they also used them because the costs were less."

The board's goal was to clarify the types of service that could be provided by an appraiser and to make those standards flexible enough to conform to different levels of service needed for a transaction. If a new home requires an appraisal, a full appraisal would be accomplished to develop a history for it.

However, if an older home with an established appraisal history needs a once-over, the proposed regulations would allow the appraiser to perform a smaller summary report--one that might not require a time-consuming field visit.

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