When a vendor or developer tells you that a product they offer is “FIRREA-compliant,” should you believe them?
FIRREA (the Financial Institutions Reform, Recovery and Enforcement Act) is a piece of legislation that was implemented in 1989 after the Savings and Loan Crisis to regulate (among other things) real estate appraisals.
FIRREA established the council (FFIEC, the Federal Financial Institutions Examination Council) that oversees every state’s appraiser regulation and certification programs. And FIRREA also set a precedent for the first Interagency Appraisal and Evaluation Guidelines (IAG), which mandate how appraisers should operate. The IAG requires appraisers to be independent and to comply with all regulations in their appraisals and evaluations.
This is why it’s inaccurate to say that any appraisal or evaluation product is “FIRREA-compliant” — because a product or form requires a human appraiser to use the product or fill out the form. It seems obvious, but it’s worth stating: if the appraiser isn’t complying with FIRREA mandates, the IAG rules, and other regulations, then the resulting appraisal or evaluation isn’t going to be FIRREA-compliant.
HouseCanary has designed its valuation and appraisal products to meet requirements specified in the IAG for evaluations and appraisals, where applicable, but it’s up to the appraiser to consult compliance specialists and ensure that the intended individual and specific use of a HouseCanary appraisal product is aligned with regulatory guidelines.