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North Carolina Introduces Legislation to Regulate Appraisal Management Companies

A bill has been drafted in the North Carolina legislature that would regulate appraisal management companies.

To summarize, the bill would require Appraisal Management Companies to register with the state appraisal board. The bill would also prohibit AMC’s from pressuring appraisers or from failing to pay appraisers.

The legislation has this section on fees:

The establishment of fees or fee schedules must be in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP). Actual fees paid for appraisal services must not be misrepresented to include any hidden charges by the registrant, and only the actual fee paid to the appraiser shall represent the total sum of the appraisal fee.

You can download the bill by clicking on the link below. The most interesting part of the measure, is the section on Prohibited Acts.

Download file

Of course introducing legislation is easy. The difficult part is getting it passed. So, we’ll have to see whether this legislation actually goes anywhere.

Comments
  1. David

    Has anyone done a study on how many appraisers will remain standing after the 1004MC/HVCC fiasco? I would be willing to pay to see that data.

  2. Corey

    Look what became of Colorado! 60% decline in new license applications.
    http://www.dora.state.co.us/real-estate/New_Fee%20Schedule_2008%20_3.pdf.pdf

  3. Justin Morton

    The decrease in new applications probably has more to do with the AQB’s increase in requirements to become an appraiser, rather than the downturn in the market.
    Let’s remember, the HVCC hasn’t even taken affect yet. So, it’s impact is still a little unclear.

  4. Tim

    I think the impact of the HVCC has become more than crystal clear. The threat of regulation and the promise of additional fees haved moved lenders to see that the firewall required by the HVCC is easily the AMC model where the terms of the appraisal assignment can be dictated to the almost a foregone value conclusion (the lowest) and the lender or subsidary can earn some undisclosed additional fees. Wether the HVCC moves forward or not this is the business model for the future. (or some variation) Appraisers who have done at least some work for AMC’s increased from 30% at the beginning of 2008 to 75% by the end of 2008. According to the study compiled by a national appraisal software provider. Trainess are finding less employment and senoir level appraisers are not wiling to let 20-30 years of appraisal experience be sold for $175 a report. Clearly the profession is going through a complete and systematic reduction until technology can deliver value estimates. At that point the residential appraiser will become extinct. If not starved out of the business before then. Again I am clearly amazed that the HVCC came about due to the collussion and fraud between a lender and a AMC and know this same business model is considered the solution ?

  5. Justin

    Appraisers who have done at least some work for AMC’s increased from 30% at the beginning of 2008 to 75% by the end of 2008. According to the study compiled by a national appraisal software provider.
    Tim, this is very interesting. I hadn’t heard it before. Do you happen to know where I could find this study?

  6. Justin Morton

    I think the impact of the HVCC has become more than crystal clear.
    I guess my point is that you can’t blame every problem within the appraisal profession on the HVCC.
    The market has taken a serious hit, and real-estate transactions are down 50% from their previous high. That is going to greatly reduce the number of appraisals that are needed, in turn reducing the business of appraisers. And the HVCC had nothing to do with this.

  7. Robert Driscoll NC1408

    I am not sure this is the place to maadke this comment, but something must be done about these Zillow estimates. They are doing as much to destroy the real estate economy as any other factor today. I am sure they (Zillow) has no idea what USPAP is about. I would appreciate comments about this very seriuos challange to the real estate market.

  8. We appeciate that even before North Carolina Introduces Legislation to Regulate Appraisal Management
    Companies. We are in Orange County|an OC realty.

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