The District of Columbia's new appraisal reform law meets federal standards, contrary to erroneous information supplied to The Post for an article in Saturday's Real Estate section. (Published 12/11/ 90)

Some real estate and lending industry groups this week called for a delay of at least six months in the start of appraisal industry reforms scheduled to take effect July 1 that for the first time require testing of appraisers.

Others connected with the appraisal industry, however, said such requests for a delay are premature.

To meet the congressionally imposed July 1 deadline, each of the states must pass its own law to license or certify appraisers based on their experience, education and testing.

To actually carry out the law in time, the states must also name appraiser supervisory commissions, validate appraisers' experience claims, approve educational courses, prepare and administer tests, award licenses or certificates and establish disciplinary procedures.

In the 16 months since the appraisal reform law was approved as part of the bailout of the savings and loan industry, 43 states, including Maryland and Virginia, as well as the District, have passed appraisal laws.

However, the federal government has notified Maryland, Virginia, the District of Columbia, and 28 other states and jurisdictions that their laws do not fully comply with the federal mandate.

Notices to another five states are expected to go out within a week.

Earlier this week, 50 state banker associations and the American Bankers Association (ABA), long opposed to several facets of the new law, petitioned the federal government to move the start date to the end of next year.

The commercial bankers contended that leaving the July 1 deadline intact will result in a shortage of appraisers, particularly in rural areas, and drive up the cost of their services to the mortgage borrowers who pay their fees.

James M. Culberson, chairman of the ABA's Community Bankers Council, said his members are being "practical," by urging examination of the issue now, because, he said, "Time flies."

An across-the-board postponement is appropriate, rather than in selective states, he said, "because everybody has problems" of some sort in meeting the July 1 startup date.

The National Association of Realtors (NAR) has been pressing for an extension of up to a year in recent meetings with regulators and members of Congress, according to Stephen Driesler, the organization's chief lobbyist.

The NAR is among several groups that have argued for some time that the July 1 commencement date is unrealistic.

Driesler said the NAR is particularly concerned about time running out on states that have been put on notice by the federal regulators that their plans need adjustment.

The start date also is creating a split within the ranks of the appraisal industry, which has welcomed the law as a means of strengthening the integrity and competency of appraisers. Six months ago the industry, represented by eight different organizations, expressed confidence that the appraisal accreditation apparatus would be in place by July 1.

Last week, the Society of Real Estate Appraisers and the Institute of Real Estate Appraisers filed a petition asking for changes in the appraisal rules that could lead to a delay in the law's implementation.

"We would like to keep things on track, but if it takes six months more to do things right, then we would rather wait," said Donald E. Kelly, the society's chief legislative counsel.

Unlike the other groups seeking a postponement, the society wants the federal regulators to reconsider their classifications for appraisers. The petition, Kelly said, is a precursor to filing a lawsuit, if necessary.

The problem is that many state laws call for three levels of accreditation -- licensing, residential certification, and general or commercial certification, Kelly said.

However, the appraisal subcommittee, which writes the rules implementing the federal reform law, has asked the states to limit their classifications to two. Licensed appraisers would handle simple residential transactions of up to $1 million, under the regulator's scheme, while certified appraisers would cover everything else, including commercial deals.

Yet another appraisal organization, the American Society of Appraisers, said it believes the calls for postponement are "premature," according to its legislative consultant, Peter Barash. The states, he said, have made "remarkably good" progress in meeting the July 1 deadline.

Moreover, Barash said, fears of shortages of appraisers in rural areas are unfounded.

Fred Finke, the acting chairman of the appraisal subcommittee, said that for the moment he still finds July 1 a legitimate goal. Finke represents the Office of the Comptroller of the Currency, which regulates commercial banks, on the subcommittee.

Finke said there is no specific time by which the appraisal subcommittee must make a decision on whether to delay the effective date of the regulations. Rather than consider a nationwide extension, Finke said he prefers to grant any deferments on a state-by-state basis.

Subcommittee member Roger Cole, who represents the Federal Reserve Bank, said he also wants to wait to make a decision closer to the July 1 date to keep pressure on the states to move forward. Giving any extensions now, he said, could prove counterproductive.

Finke also said that the subcommittee is aware of the petition to expand the number of appraiser designations but has no timetable for assessing those arguments. However, he said that the subcommittee does not want to "disadvantage a state legislature {many of which meet in January} any more than absolutely necessary by waiting too long" to decide whether to revise its position.