[ §466M-23] Appraiser independence.

504 words·~2 min read·/hi/466m-23

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)It shall be a violation of this chapter for any employee, director, officer, or agent of an appraisal management company registered in this State to engage in any act or practice that violates appraisal independence as described in subsection (b).

(b)For purposes of subsection (a), acts or practices that violate appraisal independence shall include:

(1)Any appraisal of a property offered as security for repayment of the consumer credit transaction that is conducted in connection with a transaction in which a person with an interest in the underlying transaction compensates, coerces, extorts, colludes, instructs, induces, bribes, or intimidates a person, appraisal management company, firm, or other entity conducting or involved in an appraisal, or attempts to compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate the person, for the purpose of causing the appraisal value assigned, under the appraisal, to the property to be based on any fact other than the independent judgment of the appraiser;

(2)Mischaracterizing, or suborning any mischaracterization of, the appraised value of the property securing the extension of credit;

(3)Seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and

(4)Withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided in accordance with the contract between the parties.

(c)The requirements of subsections

(a)and

(b)shall not be construed as prohibiting an appraisal management company, employee of an appraisal management company, consumer, or any other person with an interest in a real estate transaction from asking an appraiser to:

(1)Consider additional appropriate property information, including the consideration of additional comparable properties to make or support an appraisal;

(2)Provide further detail, substantiation, or explanation for the appraiser's consideration in the appraisal; or

(3)Correct objective errors in the appraisal report.

(d)Any appraisal management company, employee of an appraisal management company, or any other person involved in a real estate transaction involving an appraisal in connection with a consumer credit transaction who has a reasonable basis to believe an appraiser is failing to comply with the Uniform Standards of Professional Appraisal Practice, is violating applicable laws, or is otherwise engaging in unethical or unprofessional conduct, shall refer the matter to the director.

(e)Every appraisal management company shall establish and comply with processes and controls reasonably designed to ensure that the appraisal management company, in engaging an appraiser, selects an appraiser who is independent of the transaction and who has the requisite education, expertise, and experience necessary to competently complete the appraisal assignment for the particular market and property type. Every appraisal management company shall establish and comply with processes and controls reasonably designed to ensure that the appraisal management company conducts its appraisal management services in accordance with the requirements of title 15 United States Code sections 1639e(a) through (i), and regulations adopted thereunder. [L 2024, c 80, pt of §2]