Youngstown Daily Legal News

Cincinnati lawmaker seeks real estate appraisal licensure for Ohio

KEITH ARNOLD
Special to the Legal News
Published: June 8, 2017

A Cincinnati Republican lawmaker has a plan to conform with federal regulations implemented by the Wall Street Reform and Consumer Protection Act of 2010, also known as Dodd-Frank, before time runs on the requirement for states to adopt uniform real estate appraisal rules.

Rep. Jonathan Dever offered testimony to members of the House Civil Justice Committee last week in an effort to meet the deadline, established by the law and subsequent regulations, set to expire in three years.

House Bill 213 would establish licensing requirements for appraisal management companies, bringing the state in federal compliance and joining the 42 states that already have passed similar legislation.

Dever gave fellow members of the Ohio House of Representatives background of this type of organization.

He explained that appraisal management companies are third-party service providers hired by lenders or other financial institutions to work with appraisers to complete residential assignments.

"These functions used to be managed in-house by lending institutions, but AMCs provide independence in the process and help lenders with regulatory compliance, maintaining quality assurance, and provide additional consumer protection," Dever said, adding that HB 213 was drafted based upon the minimum federal rules, as mandated by Dodd-Frank. "So what happens if Ohio does not pass House Bill 213?

"If Ohio does not move on this legislation, lenders will not be able to use AMCs to facilitate federally related transactions in our state, as we will be in violation of federal laws and regulations."

HB 213 would prohibit a person from performing appraisal management services, or otherwise engaging in business as an appraisal management company, without an appraisal management company license.

The bill would authorize and establish procedures and criteria relating to an appraisal management company license.

Another provision of the bill would change the circumstances under which a lender can be excused from the general requirement that a person performing a real estate appraisal for a mortgage loan be licensed or certified as an appraiser.

Dever worked with state Commerce Department's Division of Real Estate & Professional Licensing, Ohio Mortgage Bankers Association, Ohio Bankers League, Ohio Coalition of Appraisal Professionals, Ohio Association of Realtors and a related trade association to arrive at consensus, he told committee members.

The lawmaker said that in addition to safeguarding appraiser independence and fraud protection, these companies provide quality assurance - an essential element to the consumers, lenders and secondary market.

Other aspects of the importance of appraisal management companies, include "protecting public safety through background checks conducted on appraisers and acting as a compliance partner for state and federal AMC regulations," Dever concluded.

At the time of publication, HB 213, which has no cosponsors, was scheduled for a second hearing before the committee.

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