That regulation would supersede an appraisal code of conduct negotiated by Mr. Cuomo, Fannie and Freddie earlier this year. The companies accepted Mr. Cuomo's terms to avoid the threat of a lawsuit over their alleged failure to ensure that appraisers are protected from pressure to inflate appraisals. Because Fannie and Freddie buy or guarantee the bulk of all U.S. mortgages, the code would become in essence a national standard.

The code would bar brokers or bank employees involved in making loans from choosing appraisers, and lenders couldn't make loans on the basis of appraisals from their employees or companies they control.

Sen. Charles Schumer, a New York Democrat, vowed to resist the amendment, calling it a "step backwards."   

Download Talking_Points_on_the_Appraisal_Amendment.doc

Click here to read the "Talking Points" . . .