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Utah Legislature passes bill to regulate Appraisal Management Companies

The Utah Legislature recently passed a bill that would regulate Appraisal Management Companies. The measure requires AMC’s to register with the Division of Real Estate of Commerce before they can legally operate within the state of Utah. The bill also lists several prohibited activities that the AMC may not engage in. This includes withholding payment as a means of coercing the apraiser to reach a pre-determined value.

You can access the bill by clicking on the link below:
Utah Legislation

The bill still has to be signed by Governor John Huntsman Jr. (R), before it goes into law, but the Governor is expected to sign the legislation.

One state down, forty-nine to go.

Comments
  1. David

    What good does that do? 1) When you agree to AMC work you essentially say that you agree to provide them with anything they ask for (excluding your firstborn child) or they retain the right to reduce or withhold payment. Appraisers hang themselves before the do they do the work.
    2) Unless i am wrong these “state bills” don’t even attempt to make it illegal for AMCs to be paid out of the appraisers pocket.
    States are only trying to avoid losing tax dollars to out of state companies. Regulation does nothing to protect the appraisers (coersion was already illegal..but never enforced) and it does nothing to protect the public.
    If I’m missing something please let me know. I would be thrilled to see how this helps anyone other than the state’s revenue cabinet.

  2. Leroy Thomas

    As an appraiser,who like doing appraisals for a fare compensation. Why won’t someone make the AMC do a decent split? The AMC increase the demands, butnever the fees. Legislate that.

  3. Mike Brunson

    Part 3 of the new law, specifically 61-2e-304 and 307 should be read by the above posters and ALL appraisers doing work for AMC’s.
    SDG
    Mike Brunson

  4. David

    Re: Mike’s comment
    Apparently Utah uses a completely different numbering/alphabet system from the rest of the country. I was unable to locate a 61-2e-304 and 307. The nearest thing that I could find to 304 and 307 discussed registration renewal. Can you tell us what you’re talking about?

  5. Rick, UT State Certified General Appraiser

    Gentlemen,
    If I cut and pasted the link below correctly, you should be able to find the Utah legislation:
    and to address the question put to Mike:
    61-23-304 (page 13, line 375) which talks about required disclosure: the total amount of fee paid to the appraiser or, the “%” figure of the total fee collected;
    and,
    61-2e-307 (page 14, line 422) which talks about prohibitions related to an appraiser; i.e., through coercion, extortion, collusion, itimidation, etc.
    http://le.utah.gov/~2009/bills/hbillamd/hb0152.pdf
    I hope this helps.

  6. David

    Re: Rick’s Comments Above
    I stand 1/2 corrected then. Utah is indeed doing something to protect the public.
    Coercion however has never been the problem for appraisers with guts. The only problem we’ve truly had was a lack of appraisers with backbone and a lack of enforcement. You can outlaw coercion and intimidation until the sun runs out of fuel. Without enforcement however, words are useless.
    What appraisers NEED is a simple clause to protect them against skimming. I’ll even write it for the legislators:
    “It shall be considered illegal for any nonlicensed entity to be compensated out of the appraisers fee”.
    This is not brain surgury folks. Realtors have prohibited this and mortgage brokers have as well. I’m not asking anyone to reinvent the wheel.
    I personally can do without any AMC regulation. All we need is this one simple state law.

  7. Justin Morton

    What appraisers NEED is a simple clause to protect them against skimming. I’ll even write it for the legislators:
    “It shall be considered illegal for any nonlicensed entity to be compensated out of the appraisers fee”.

    This actually isn’t such a bad idea. And provided you don’t mention specific fees, you could get around any anti-trust issues.

  8. Carol Howell

    Simply refuse to do the work for them. I have done that for years. Yes I lost some business. But I am still in business and going strong. I tell them when they call what my fee is and that it is not negotiable. Pretty soon if they need my services they call back and pay me or they call some other hungry, gullible “appraiser” who is willing to work for pennies. As to coersion. It works the same. All we have to sell is our integrity. And when you’ve sold it. You can never get it back. Integrity can never be legislated. There will always be want to be appraiser’s out there willing to put their license on the line for a fee. No legislation will ever solve that one. But the intent of this one is good. It is not acceptable for Realtors, Title officers, Insurance Sales people to share a fee/commission with any unlicensed entity or person. So why is it okay for Appraiser’s? This bill was a step in the right direction but did not go far enough.

  9. David

    Carol I believe you have a good idea (in theory) by refusing to work for AMCs. If you convince the other 59,999 active residential appraisers to stop accepting work from AMCs you may really be onto something.
    Unfortunately the vast majority of orders are now going through AMCs (see Alamodes Appraisal Press webpage for an idea of just how dramatically AMC orders have increased over the past 4 months).
    You can turn to CPA work and lawyer work but there is only so much to go around (and most of your competitors have beat you to the starting line by 6 months).

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