In 2008, Connecticut, Kentucky, Missouri, and New York all passed new laws prohibiting appraisal pressure. Here is a quick summary of each state’s legislation.
Connecticut – Prohibits mortgage brokers, real estate brokers, and real estate salespersons from attempting to influence residential appraisals, and from refusing to pay an appraiser or intentionally avoiding a specific appraiser in the future, because of an appraiser’s previous work that reflected a fair market value estimate that was less than the sale contract price. (House Bill 5577)
Kentucky – Makes it unlawful in Kentucky for “any person in the course of a mortgage transaction to improperly influence the development, report, result, or review of a real estate appraisal sought in connection with a mortgage loan.” (House Bill 552)
Missouri – Makes it illegal in Missouri to “influence, through extortion or bribery, the development, reporting, result, or review of a real estate appraisal”. (House Bill 2188)
New York – Criminalizes improperly influencing the development, reporting, or review of a real estate appraisal relating to securing a home loan. (Senate Bill 8143)
A tip of the cap to the Appraisal Institute’s new Manager of State and Industry Affairs, Scott DiBiasio. Mr. DiBiasio has only been on the job six weeks, and already he’s seen legislation passed in four states. Well done, Scott. Well done.
Manager of Appraisal Specialties