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Fifty states. Fifty potentially different legislations. Fifty chances to miss a unique provision and be held at the mercy of regulators. Fifty different fees to pay. These are just some of the problems that appraisal management companies (AMCs) face with each state enacting its own version of an AMC registration act. Valuation Review took an in-depth look at the AMC state registration experience — from all sides. This is a round-up of our exclusive content that you can only read here at Valuation Review.

Although there is some obvious frustration and animosity, some AMCs understand the motivation behind the registration, even if they feel the growing pains of legislation development.

“StreetLinks supports the efforts each state has put forth for AMC regulation. While the AMC industry has been around for over 20 years, the last two to three years have brought an influx of new providers,” Hurst said. “Ensuring that all industry participants are providing compliant and legitimate services to both lenders and appraisers is paramount.” 

Frank O’Neill Jr., DataQuick chief appraiser., remarked that it’s important to remember that the concept behind the AMC registration laws is intended to be a consumer protection initiative to eliminate abuses and better ensure appraiser independence.

Given that each state is responsible for crafting its own appraisal management company (AMC) registration laws, there is no one state registration law that matches that of another. Needless to say, complying with the currently enacted laws is complicated. Let’s not forget that there are still 15 states with legislation coming down the pike.

“The biggest impact on the AMC industry is in the area of compliance with the state laws,” said Richard Borges II, president of the Appraisal Institute. “The Appraisal Institute anticipates there eventually will be 55 different state AMC laws. AMCs that operate in multiple states will have to very carefully watch the registration deadlines, fees, operating requirements and any changes that occur to the rules and regulations to ensure they are in compliance.” 

Lincoln Appraisal and Settlement Services already spent $75,000. According to StreetLinks President Tom Hurst, StreetLinks plans to spend more than $1 million this year to satisfy registration fees. The William Fall Group reported an expected cost of $250,000. LRES Corp. will spend approximately $50,000. InHouse Inc. has already spent more than $100,000. And Appraisal Logistics anticipates spending $150,000, with annual renewals in excess of $100,000. But the costs don’t end at registration. While reputable AMCs are reaching deep into their pockets, some have shifted the costs to other areas — one of those avenues being the appraisers.

Conflict and costs. Talk to anyone in the industry about the appraisal management company (AMC) state registration issue and those are the two primary themes that bubble to surface. The conflicts are complicated and the costs are more than monetary. To date, legislatures in 34 states have enacted comprehensive AMC oversight and registration laws. Twenty-four states have also completed their rulemaking process, while 10 states are still making their way through the rulemaking process. The impact of the regulation issue is being felt by the appraisal industry across the country.

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, cautioned homeowners and potential homebuyers that bad neighbors can significantly reduce nearby property values. Bad neighbors can include homeowners with annoying pets, unkempt yards, unpleasant odors, loud music, dangerous trees and limbs or poorly maintained exteriors. A homeowner or prospective homebuyer should visit a street on several days at various times to learn more about what is happening in the neighborhood. A home’s proximity to a bad neighbor also can impact the rate of potential decline in value.

The December Mortgage Monitor report released by Lender Processing Services and covering performance data for the full 2012 calendar year, found that while mortgage delinquency rates remained at elevated levels, they have shown steady improvement, ending the year 32 percent lower than the January 2010 peak. Additionally, following a year of regional improvement in foreclosure inventories (marked by stark contrasts between judicial and non-judicial foreclosure states), the national foreclosure inventory rate began to decline toward the end of 2012 from historic highs experienced during the crisis.

Lender Processing Services Inc. (LPS) has entered into settlement agreements with the attorneys general of 46 states and the District of Columbia. The multi-state settlement, which includes an aggregated payment by LPS of $127 million, resolves inquiries surrounding the company's default operations, including former document preparation, verification, signing and notarization practices of certain operations. 

Freddie Mac and Fannie Mae provided the January 2013 Uniform Appraisal Dataset (UAD) Update and Uniform Collateral Data Portal (UCDP) Release Notification to announce the first phase of the conversion of current UAD compliance warning edits to fatal UAD edits in the UCDP. The first phase, targeted for implementation in June 2013, includes the following data fields: Appraisal effective date; subject contract; price/comparable sale price; above grade gross living area; and sale type. 

The number of California homeowners pushed into the foreclosure process fell last quarter to the lowest level in six years, the result of rising home values, an improving economy and a shift toward short sales, a real estate information service reported. During fourth quarter 2012, lenders recorded a total of 38,212 Notices of Default (NoDs) on California houses and condos. That was down 22.1 percent from 49,026 during the prior three months, and down 37.9 percent from 61,517 in fourth-quarter 2011.

The Appraisal Foundation began its annual search for qualified candidates to serve on the Appraisal Practices Board (APB). Completed applications for these vacancies must be received by April 2, 2013. There are four vacancies on the APB. The Appraisal Foundation is always interested in expanding the diversity of its boards by considering applications from appraisers involved in various appraisal disciplines such as real property, business valuation or personal property.

ZipRealty Inc., an online technology-enabled residential real estate brokerage company, announced that according to its Home Price Report, which is based upon authoritative transactional and MLS data in 33 major metros, U.S. median home sale prices have increased 11 percent on a year-over-year basis to $211,312. In 2011, the median home sale price was $190,000, according to data released by ZipRealty.

In an effort to continue their growth strategy for the New Year market and to increase their national presence, Landmark Network Inc. announced that it has acquired regional appraisal management company, Coast 2 Coast Appraisal Group. This is the second such acquisition completed by Landmark Network within the last 60 days.

The Appraisal Foundation, a national non-profit organization dedicated to the advancement of professional valuation and protecting the public trust, has released two new pamphlets benefitting consumers and lenders. A Guide to Understanding a Residential Appraisal was developed specifically for consumers. Thousands of home buyers are given a copy of their appraisal prior to closing on their new home. This pamphlet provides consumers an overview of the residential appraisal and how it relates to the home buying process.

Global DMS, provider of Web-based compliant valuation management software, integrated its valuation management software with LendingQB’s end-to-end, browser-based loan origination system (LOS).  This integration is part of a major initiative to advance valuation compliance by tightly integrating the company’s eTrac platform with LOS vendors. As a result, the entire appraisal ordering and management process becomes seamless and fully compliant with state and federal regulations.

Solidifi, the third largest independent provider of residential real estate appraisals in the U.S., announced that its parent company, Real Matters has appointed Robert Courteau to its board of directors. Courteau has held senior executive positions at leading technology companies, most recently at SAP where he served as president, North America. He is currently the chief executive officer of Altus Group Limited, a global leader in professional consulting, software and data solutions for the real estate industry.