Title 15, Commerce and TradeRelease 119-110
§1639e Appraisal Independence Requirements
Title 15 › CHAPTER 41 — CONSUMER CREDIT PROTECTION › SUBCHAPTER I — CONSUMER CREDIT COST DISCLOSURE › Part B — Credit Transactions › § 1639e
Summary
Stops people from messing with home appraisals when a loan is backed by a borrower’s main home. No one with a stake in the deal may pay, pressure, threaten, bribe, or try to influence an appraiser, appraisal firm, or appraisal management company to change a value. It also bans lying about the appraisal value, trying to push a specific number, or refusing to pay on time for work done under the contract. Lenders, brokers, appraisal managers, or others are allowed to ask an appraiser to consider more comparable homes, give more detail or explain the value, or fix mistakes. Appraisers and appraisal management companies may not have any direct or indirect interest in the property or the sale. Anyone who thinks an appraiser broke appraisal rules or behaved unethically must report it to the state appraiser licensing agency. If a lender knows of a violation at or before closing, the lender must not make the loan unless it documents that it checked carefully and the appraisal is not materially wrong. Federal financial regulators will write rules about these appraisal independence standards. The Board must issue interim final regulations no later than 90 days after July 21, 2010. Regulators may also write rules about making appraisal reports portable between lenders for 1–4 unit single-family homes that are the borrower’s main home. Lenders must pay appraisers a customary and reasonable market rate, supported by independent studies. A “fee appraiser” means an independent State-licensed or certified appraiser (or a company that uses them) who is paid for the work. Voluntary charity appraisals count as customary. Complex appraisals may be paid more. The Home Valuation Code of Conduct ends when the interim regulations are issued. Violators face civil fines up to $10,000 per day for a first offense and $20,000 per day for later offenses; the proper agency will assess those penalties.
Full Legal Text
Title 15, §1639e
Commerce and Trade, Source: USLM XML via OLRC
(a)In general
It shall be unlawful, in extending credit or in providing any services for a consumer credit transaction secured by the principal dwelling of the consumer, to engage in any act or practice that violates appraisal independence as described in or pursuant to regulations prescribed under this section.
(b)Appraisal independence
For purposes of subsection (a), acts or practices that violate appraisal independence shall include—
(1)any appraisal of a property offered as security for repayment of the consumer credit transaction that is conducted in connection with such transaction in which a person with an interest in the underlying transaction compensates, coerces, extorts, colludes, instructs, induces, bribes, or intimidates a person, appraisal management company, firm, or other entity conducting or involved in an appraisal, or attempts, to compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate such a person, for the purpose of causing the appraised value assigned, under the appraisal, to the property to be based on any factor other than the independent judgment of the appraiser;
(2)mischaracterizing, or suborning any mischaracterization of, the appraised value of the property securing the extension of the credit;
(3)seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and
(4)withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided for in accordance with the contract between the parties.
(c)Exceptions
The requirements of subsection (b) shall not be construed as prohibiting a mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, consumer, or any other person with an interest in a real estate transaction from asking an appraiser to undertake 1 or more of the following:
(1)Consider additional, appropriate property information, including the consideration of additional comparable properties to make or support an appraisal.
(2)Provide further detail, substantiation, or explanation for the appraiser’s value conclusion.
(3)Correct errors in the appraisal report.
(d)Prohibitions on conflicts of interest
No certified or licensed appraiser conducting, and no appraisal management company procuring or facilitating, an appraisal in connection with a consumer credit transaction secured by the principal dwelling of a consumer may have a direct or indirect interest, financial or otherwise, in the property or transaction involving the appraisal.
(e)Mandatory reporting
Any mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, or any other person involved in a real estate transaction involving an appraisal in connection with a consumer credit transaction secured by the principal dwelling of a consumer who has a reasonable basis to believe an appraiser is failing to comply with the Uniform Standards of Professional Appraisal Practice, is violating applicable laws, or is otherwise engaging in unethical or unprofessional conduct, shall refer the matter to the applicable State appraiser certifying and licensing agency.
(f)No extension of credit
In connection with a consumer credit transaction secured by a consumer’s principal dwelling, a creditor who knows, at or before loan consummation, of a violation of the appraisal independence standards established in subsections (b) or (d) shall not extend credit based on such appraisal unless the creditor documents that the creditor has acted with reasonable diligence to determine that the appraisal does not materially misstate or misrepresent the value of such dwelling.
(g)Rules and interpretive guidelines
(1)In general
Except as provided under paragraph (2), the Board, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau may jointly issue rules, interpretive guidelines, and general statements of policy with respect to acts or practices that violate appraisal independence in the provision of mortgage lending services for a consumer credit transaction secured by the principal dwelling of the consumer and mortgage brokerage services for such a transaction, within the meaning of subsections (a), (b), (c), (d), (e), (f), (h), and (i).
(2)Interim final regulations
The Board shall, for purposes of this section, prescribe interim final regulations no later than 90 days after July 21, 2010, defining with specificity acts or practices that violate appraisal independence in the provision of mortgage lending services for a consumer credit transaction secured by the principal dwelling of the consumer or mortgage brokerage services for such a transaction and defining any terms in this section or such regulations. Rules prescribed by the Board under this paragraph shall be deemed to be rules prescribed by the agencies jointly under paragraph (1).
(h)Appraisal report portability
Consistent with the requirements of this section, the Board, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau may jointly issue regulations that address the issue of appraisal report portability, including regulations that ensure the portability of the appraisal report between lenders for a consumer credit transaction secured by a 1-4 unit single family residence that is the principal dwelling of the consumer, or mortgage brokerage services for such a transaction.
(i)Customary and reasonable fee
(1)In general
Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.
(2)Fee appraiser definition
(A)In general
For purposes of this section, the term “fee appraiser” means a person who is not an employee of the mortgage loan originator or appraisal management company engaging the appraiser and is—
(i)a State licensed or certified appraiser who receives a fee for performing an appraisal and certifies that the appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice; or
(ii)a company not subject to the requirements of section 3353 of title 12 that utilizes the services of State licensed or certified appraisers and receives a fee for performing appraisals in accordance with the Uniform Standards of Professional Appraisal Practice.
(B)Rule of construction related to appraisal donations
If a fee appraiser voluntarily donates appraisal services to an organization eligible to receive tax-deductible charitable contributions, such voluntary donation shall be considered customary and reasonable for the purposes of paragraph (1).
(3)Exception for complex assignments
In the case of an appraisal involving a complex assignment, the customary and reasonable fee may reflect the increased time, difficulty, and scope of the work required for such an appraisal and include an amount over and above the customary and reasonable fee for non-complex assignments.
(j)Sunset
Effective on the date the interim final regulations are promulgated pursuant to subsection (g), the Home Valuation Code of Conduct announced by the Federal Housing Finance Agency on December 23, 2008, shall have no force or effect.
(k)Penalties
(1)First violation
In addition to the enforcement provisions referred to in section 1640 of this title, each person who violates this section shall forfeit and pay a civil penalty of not more than $10,000 for each day any such violation continues.
(2)Subsequent violations
In the case of any person on whom a civil penalty has been imposed under paragraph (1), paragraph (1) shall be applied by substituting “$20,000” for “$10,000” with respect to all subsequent violations.
(3)Assessment
The agency referred to in subsection (a) or (c) of section 1607 of this title with respect to any person described in paragraph (1) shall assess any penalty under this subsection to which such person is subject.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2018—Subsec. (i)(2). Pub. L. 115–174 designated existing provisions as subpar. (A) and inserted heading, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A) and realigned margins, and added subpar. (B).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on the date on which final
Regulations
implementing such section take effect, or on the date that is 18 months after the designated transfer date if such
Regulations
have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as an
Effective Date
of 2010 Amendment note under section 1601 of this title.
Reference
Citations & Metadata
Citation
15 U.S.C. § 1639e
Title 15, Commerce and Trade
Last Updated
Sep 23, 2026
Release point: 119-110