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Association News, Government AffairsPAR testifies about AMCs before state House
Creating a level playing field for appraisers and appraisal management companies (AMCs) is the ultimate goal of legislation being introduced in the state House of Representatives, according to Michelle Bradley, chair of PAR’s AMC Task Force, who testified before the state House Professional Licensure Committee Wednesday.
Michelle Bradley
“AMCs in Pennsylvania are unregulated and currently operate with neither state nor federal government oversight,” Bradley, an appraiser with Czekalski Real Estate, Natrona Heights, said. “Appraisers are subject to regulation by the State Board of Certified Appraisers and work within the nationally sanctioned Uniform Standards of Professional Appraisal Practice (USPAP). As third-party intermediaries, AMCs are not accountable to state regulation or consumers. House Bill 2334 will help create a level playing field.”
She said the bill will guarantee that those responsible for appraisal services are in good standing with the state board and will require AMCs to use USPAP record-keeping rules. Currently there is no way to identify AMCs, nor who owns and operates them.
At the root of the issue is the federal Home Valuation Code of Conduct (HVCC), which has caused significant upheaval in the appraisal process since its adoption more than a year ago. To meet the requirements of the HVCC, many lenders have increased their use of AMCs. According to the National Association of REALTORS® (NAR), only 30 to 40 percent of lenders used AMCs prior to the HVCC; today AMCs are used by 60 to 70 percent of the lending market nationally.
“Consumers also need to be protected against unscrupulous appraisal management companies (AMCs) and HB 2334 would give that protection,” Bradley said. “NAR research shows that consumers are paying higher fees to AMCs for appraisals that are frequently inaccurate and misrepresent the value of property. In many cases, closings are being delayed in the process.”
PAR worked with Reps. Dick Stevenson (R-Butler) and Sue Helm (R-Dauphin) and members of the Appraisal Institute to develop legislation to regulate AMCs in Pennsylvania. HB 2334 is currently being introduced by Rep. Stevenson in the PA House of Representatives. Eighteen states have already enacted similar legislation; 11 states are working on legislation.
HB 2334 will facilitate the process for filing a complaint against an AMC or an appraiser working for an AMC. It also grants the state Appraisal Board the authority to review the AMCs’ records.
“Ultimately, HB 2334 will guard the interests of consumers and the real estate industry,” Bradley concluded.
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Kim Shindle is the Manager of Media Relations at the Pennsylvania Association of Realtors®. |
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Since Congress is actually working to end HVCC under the new financial services bill, why don’t we in PA ban the HVCCs. There is no need for them if the lenders did a better job or auditing appraisals they get.
HVCCs are absurd and just a money sucking pig from consumers that have caused values to continually go down.