Sure- there isn't anything secret about this.
The current push by the regulators is to focus on the review standards that institutions must meet. Little known is a requirement that the institutions set up an auditing process to qualify the reviewers they engage and to review the reviewers and their product. In other words, institutions have to document that the appraisers they hire as reviewers are competent in the property type and (i in the case where the reviewers provide their own, independent value) are competent in the markets where they work.
In order to do this, the reviewer's qualifications will be reviewed as well as the review reports and the original report under review.
I would think that will make many happy: reviewers who work for regulated institutions will have to be qualified, competent, and the quality of their product will be regularly evaluated.
While it isn't practical for a federal regulator to audit individual appraisals on a large scale, it is practical for a federal regulator to audit the review process that is in place. By auditing the review process, the institution and reviewers will be held accountable for the quality of their work. Their "quality" is directly linked to the original appraisal they have reviewed. In order evaluate the reviewer, both the review and original report under review will have to be evaluated.
Reviewers who are not competent or qualified will run into issues when they are audited.
Reviewers who are inappropriately applying the review standards to the work under review will have issues when they are audited.
Reviewers who sign-off on below-standard appraisals will have issues when they are audited.
The principal of applying the most effective focus on the point where it will have the maximum impact is at work.
It is no doubt obvious to you what the outcome of this increased scrutiny will be. If quality is lacking on the original appraisal level and that lack of quality (as measured by non-credible results and failure to meet the reporting standards) and it is not being addressed on the review level, by means of the review audit, that will change.
This force is already at work. Don't expect an overnight change but expect a change. It is already happening.
One negative consequence of the above is that some institutions/reviewers may over-react. That overreaction will result in a higher level of scrutiny at the original appraisal level. More scrutiny = more requests for additional data and comments. I don't anticipate that being the majority reaction, but it doesn't need to be a majority reaction to have a disruptive impact on the field appraiser. In the end, things will balance out.
Like any other enforcement action, it only works if it is (a) actually applied; (b) applied consistently; (c) applied evenly and to everyone, and ; (d) the expectation is that the enforcement will be sustained and not a flash-in-the-pan.
Anyone who avails themselves to the opportunity to participate at events where these issues are discussed by the parties (regulators) who enforce them can hear about it first hand. Anyone who avails themselves to the opportunity to participate at events where the lenders are reacting to these changes can hear how they are implementing the audit process.
Of course, I'm giving you my interpretation of what the presenters have said. No doubt someone else may have a different interpretation.
Ergo, my optimism that change is in the works. Like anything else, if it happens as I've laid it out, some may be happy; others, maybe not.
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