U.S. Appraisal Oversight Body Quiet For 7 Months, Now Running With 30% Smaller Staff

The U.S. government agency tasked with regulating the nation's real estate appraisals has undergone significant cuts to its staff and budget amid turmoil in the industry's leadership ranks.

The Appraisal Subcommittee's acting executive director, Matt Ponzar, told the ASC's board in a meeting last month that the subcommittee is “currently operating with nearly 30% fewer staff.”

It was the first meeting the body has held since November, despite guidance on its website that regular meetings are supposed to occur at least four times a year.

The ASC administers the regulatory framework for all real estate appraisers, operating under the Federal Financial Institutions Examination Council. The board of the ASC is made up of officials from agencies like the Federal Reserve, the Department of Housing and Urban Development and the Federal Deposit Insurance Corp.

“The subcommittee is focused on the president's directives to evaluate and cut costs, reduce unnecessary travel and consolidate approval and oversight of agency expenses,” Ponzar, who is also the ASC's general counsel, said at the June 18 meeting.

The ASC serves a fundamental role in the real estate ecosystem, with a mission to “maintain public trust in the appraisal profession by ensuring that appraisers are effectively regulated.” It had 22 full-time positions as of the end of 2024, five of which were vacant, according to its annual report.

Ponzar didn't respond to Bisnow’s request for comment. ASC acting Chair Luke Brown declined to comment.

“Undermining the ASC — whether through insufficient resources or ineffective leadership — would create unnecessary risk for lenders and the broader financial system by weakening trust in the appraisal process,” former ASC Executive Director James Park told Bisnow in a statement.

Appraisals are required in nearly every commercial real estate transaction, with a third-party, licensed professional assigned to accurately estimate property valuations — a task growing in importance as more than $1.5T in commercial real estate loans approach maturity by the end of this year.

But the job has gotten even more difficult as appraisers' ranks have thinned and deal velocity slowed in the years following the pandemic, making valuing properties more challenging.

The ASC's role is to ensure states comply with federal guidelines when licensing appraisers, maintain a national appraiser registry and monitor The Appraisal Foundation, known as TAF, which creates testing and certification materials for the industry.

“Without a well-functioning ASC, lenders will lose a key line of defense that ensures appraisers meet consistent qualification criteria and follow uniform valuation standards,” Park said.

Park declined to comment directly on the cuts or other items discussed in the recent meeting, which he did not participate in. 

The cuts coincide with growing controversy surrounding the organizations that train and license appraisers.

This year, two lawsuits have been filed against the Appraisal Institute, a membership organization that provides education, upholds ethical standards and advocates on behalf of the industry. 

A former executive sued the nonprofit in March, alleging widespread fraud. Alissa Akins, the former director of education and publications at the Appraisal Institute, alleged that it ignored state-level requirements and knowingly misrepresented test results to state regulators. As a result, some students passed when they should have failed and vice versa, according to the lawsuit, first reported by Bisnow. 

Former AI CEO Cindy Chance sued AI in May, claiming that the nonprofit’s senior leadership failed to take action over reports of inappropriate behavior and a sexually charged work environment. The lawsuit — and an investigation by The New York Times into the claims and alleged cover-ups — drove Craig Steinley, a longtime AI executive, to be ousted from the group, though he has since been dropped from the lawsuit. 

The AI distributes the Uniform Standards of Professional Appraisal Practice, the quality control standards for the profession, along with related exams required to receive and maintain certifications.

TAF, which is separate from AI but has a critical role in standardizing appraisals, has similarly faced criticism from the industry over its financial motivations and potential conflicts of interest.

The quasi-governmental entity creates the USPAP guidelines, which are then distributed by organizations like AI to the nearly 80,000 certified and licensed real estate appraisers in the United States. 

Appraisers have raised concerns that TAF has become increasingly reliant on the sale of USPAP educational materials, which industry professionals are required to buy. TAF started to turn down grant funding it had long accepted from the ASC and barred federal monitors from its meetings, Bisnow reported.

TAF distanced itself from the ASC as federal investigations into appraisal bias have spread. It struck a deal last year to settle a discrimination investigation by HUD, agreeing to prop up a scholarship program for an online training program and to encourage applicants from diverse backgrounds.

The ASC was at the forefront of investigating the issues. It held a series of hearings over three years, with the last taking place Feb. 13, 2024. In the end, the ASC called for more transparency from TAF about what former Consumer Financial Protection Bureau Director Rohit Chopra called its “insular governance processes.”

“For more than three decades, the Appraisal Subcommittee has played a foundational role in maintaining the integrity of the nation’s real estate valuation system — a critical component of safe and sound lending practices,” Park said in his statement. 

During the June 18 meeting, Ponzar boasted that the recent cost-cutting efforts have saved the ASC more than $1M. He added that, even with the smaller staff, the speed of state compliance reviews increased by 68% compared to last year.

The meeting was the first to take place since November, Ponzar said. That also makes it the first since he took over as executive director, replacing Park, who left the organization at the beginning of the year after serving in the role since 2009.

In 2024, it held a special virtual meeting in January, followed by regular meetings in March, June, September and November, according to the annual report. It also held 11 special, closed virtual meetings.

In its first meeting of 2025 last month, the group acknowledged that CFPB Deputy Director Zixta Martinez, who assumed the role of chair of the ASC in April 2022 and served throughout the appraisal bias hearings, was absent. She was placed on administrative leave in February as part of an upheaval at the CFPB, Politico reported. 

That month, the federal agency, which supervises banks, lenders and other financial entities, got caught in the crosshairs of the Trump administration’s Department of Government Efficiency. The CFPB’s headquarters closed, and employees were told to stop any work. 

Beyond the CFPB, DOGE has sought to maximize productivity by cutting excess regulation and spending across all government agencies. And despite disruptions to both the ASC and the greater appraisal landscape, more cuts could be on the way.

“There are several more efforts underway to continually improve our overall efficiency and effectiveness,” Ponzar said during the meeting. “We anticipate even more savings by the end of our fiscal year in September.”

Ryan Wangman contributed to this story.