Source: 15 U.S. Code § 1639e — Appraisal Independence Requirements
Enacted as: Truth in Lending Act (TILA) § 129E, added by the Dodd-Frank Wall
Street Reform and Consumer Protection Act (Pub. L. 111-203), Title XIV, § 1472(a),
July 21, 2010, 124 Stat. 2187; amended by Pub. L. 115-174, § 102, May 24, 2018.
Official source: https://www.law.cornell.edu/uscode/text/15/1639e (U.S. Code
mirror; statutory text is a U.S. government work, public domain, 17 U.S.C. §105)
Retrieved: July 28, 2026
---
(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 subsection
(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 defined
(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.