The "Appraisal Modernization Act" aims to enhance the efficiency and consistency of housing market valuations for all mortgage loan applicants, borrowers, and communities. It seeks to achieve this by establishing a comprehensive public appraisal database and by creating a consumer right to request a reconsideration of value for appraisals.

The bill amends the Federal Housing Enterprises Safety and Soundness Act of 1992 to mandate the creation of a public appraisal database. This database will provide residential real estate appraisal data to the public, federal, and state governments. Key agencies such as the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Housing Administration, Department of Agriculture, and Department of Veterans Affairs are required to contribute both historical and ongoing quarterly appraisal data.

The data collected for the database will be extensive, including detailed information on assignment, subject property, market conditions, sales contracts, and comparable properties. Crucially, it will also include the corresponding census tract, mortgage loan purpose, and the race and ethnicity of the borrower. While the Agency may modify publicly available data to protect privacy, an unredacted version will be accessible to various federal and state enforcement and regulatory agencies.

Furthermore, the bill amends the Truth In Lending Act to establish a consumer right to a reconsideration of value or a subsequent appraisal. It defines an unacceptable appraisal practice, which includes using unsupported or subjective terms, inaccurate data, inappropriate comparable properties, or failing to make proper adjustments. This provision ensures consumers have a formal process to challenge potentially flawed appraisals.

Creditors are required to implement review and resolution procedures for consumer-initiated reconsideration requests, including providing a standardized disclosure and request format. If material deficiencies or unacceptable appraisal practices are identified and not corrected, creditors must order a subsequent appraisal at their own expense and refer findings to appropriate regulatory bodies. In cases where discrimination is suspected, creditors must order a subsequent appraisal, refer the matter to enforcement agencies, and the appraiser will reimburse the cost if discrimination is determined.

Creditors must retain all documentation related to reconsideration requests for seven years. The Federal Housing Finance Agency is tasked with issuing final rules and guidance within one year to implement and enforce these new provisions.