In June 2017, there was a proposal to repeal the regulation requiring the New Jersey Department of Banking and Insurance (DOBI) to publish in the state register a survey of third-party appraisal fees. Appraisers and selected players within the appraisal industry may have seen these headlines, unsure as to its significance.
Valuation Review reached out to Real Estate Valuation Advocacy Association (REVAA) Executive Director Mark Schiffman, who addressed this subject by way of a comment letter written to DOBI looking for both an understanding and a clearer direction on the language used pertaining to the AMC fees. Schiffman provided such clarity to us as to what this is, and what it means for appraisers practicing in New Jersey.
Schiffman indicated that from REVAA’s perspective, this really was not a matter of significance.
“From our (REVAA’s) perspective, this is a nothing story,” Schiffman told us. “All the New Jersey DOBI did was get an old rule off their books that was no longer needed or one that needed to be enforced because the state of New Jersey passed an AMC licensing law in 2017. It means this provision was redundant and no longer needed in the banking rules.
“When the original language was adopted years ago, there was no AMC legislation in place. The state passed AMC licensing legislation in 2017, so this language was no longer needed,” Schiffman added. “The AMCs will be licensed once rules are adopted, just like they are in other states.”
The DOBI, in changing its mind about the original proposal, suggested that its original concerns about AMCs subsided. Schiffman elaborated on what exactly this meant.
“At the time the law was put in place, the growth of use of AMCs by lenders was increasing and the industry was changing,” he said. “Given the economic calamity at the time, the state likely wanted to be sure they were keeping an eye on AMCs.
“As it turns out, the AMC model has not been a problem and the passage of a state AMC statute means this language was redundant in the banking regulations,” Schiffman added.
Generally speaking, where does the REVAA executive see all of this going? What will change, if anything and how will AMC licensing in New Jersey be affected?
“Nothing will change,” Schiffman said. “All this equates to is a regulatory clean-up. Again, the DOBI removed an outdated provision in banking rules that was no longer needed, nor being enforced, because the state passed an AMC licensing law in 2017.”