Ohio REALTOR-backed legislation on Appraisal Management Companies OK'd by Senate Committee
By Scott Williams, Ohio REALTORS Vice President of Public Policy
A measure to establish regulations to allow the state’s Appraisal Management Companies (AMC) to appraise for federally backed mortgages passed the Ohio Senate Government Accountability and Oversight Committee yesterday. The full Senate is expected to vote on the measure, which has the strong support of Ohio REALTORS, in the next few weeks.
HB 213, sponsored by Rep. Jonathan Dever (R-Cincinnati), is necessary to comply with Dodd Frank requirements. It previously passed the Ohio House.
This measure requires lenders ordering an appraisal to utilize an AMC in an effort to eliminate any outside influence on the appraiser in the determination of value. The AMC acts as a firewall and selects and assigns the appraiser after receiving an order.
Under federal law, if a state does not regulate appraisal management companies in accordance by Aug. 10, 2018, AMCs are barred from providing appraisal management services in that state for federally related transactions. This requirement does not apply to an appraisal management company that is owned and controlled by a federally regulated depository institution. To comply with federal law, the state must require that appraisal management companies:
- Register with, and be subject to supervision by, an appraiser certifying and licensing agency in the state or states where company operates;
- Verify that only state-certified or state-licensed appraisers are used for federally related transactions;
- Require that appraisals comply with the Uniform Standards of Professional Appraisal Practice; and
- Require that appraisals are conducted in accordance with the statutory valuation independence standards under the Truth in Lending Act and its implementing regulations.
- These are the same requirements that any current independent appraiser must meet to be licensed in Ohio and appraise for federally related transactions.
If an appraisal management company is a subsidiary owned and controlled by an insured depository institution and regulated by a federal financial institutions regulatory agency, the appraisal management company is subject to all of the minimum requirements except the requirement to register with a state.
At this time 43 states have adopted these requirements in order to be able to continue to allow their state Appraisal Management Companies to conduct appraisals for these federal transactions. Ohio must act now so we do not have any interruptions in our ability to offer these loan products through lenders utilizing state appraisal management companies.
