BILL NUMBER: SB 633 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2009
INTRODUCED BY Senator Wright
FEBRUARY 27, 2009
An act to amend Section 11302 of, and to add Section
11324.5 to, the Business and Professions Code, and to amend Section
1090.5 of the Civil An act to amend Section 11423 of
the Business and Professions Code, relating to real estate
appraisers.
LEGISLATIVE COUNSEL'S DIGEST
SB 633, as amended, Wright. Real estate appraisers.
Existing law, the Real Estate Appraisers' Licensing and
Certification Law, provides for the licensure and regulation of real
estate appraisers and vests the duties of enforcing and administering
that law in the Office of Real Estate Appraisers. Existing law
requires a lender in a loan transaction secured by real property to
provide notice, as specified, to a loan applicant that, upon request,
the applicant is entitled to receive a copy of the appraisal report,
provided he or she has paid for the appraisal. Existing law requires
that an applicant's written request for a copy of an appraisal be
received by the lender no later than 90 days after the lender has
provided notice of the action taken on the application, or the
application has been withdrawn. Existing law also requires the lender
to mail or deliver a copy of an appraisal within 15 days after
receiving a written request from the applicant or within
15 days after receiving the appraisal, whichever occurs later.
This bill would delete these requirements, and instead require
that the lender mail or deliver a copy of the appraisal report to the
loan applicant within 15 days of receiving the appraisal, provided
the applicant has paid for the appraisal.
Existing law prohibits a person with an interest in a real estate
transaction involving an appraisal to improperly influence or attempt
to improperly influence, through coercion, extortion, or bribery,
the development, reporting, result, or review of a real estate
appraisal sought in connection with a mortgage loan.
This bill would require that a person making an appraisal in
connection with a mortgage loan shall make at least one personal
visit to the property that he or she is appraising. The bill would
specify that this duty may not be assigned or delegated to any other
person or employee of the appraiser. As applied to a licensed
appraiser, as defined, a violation of these provisions would be
deemed a violation of the Real Estate Appraisers' Licensing and
Certification Law.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 11423 of the
Business and Professions Code is amended to read:
11423. (a) For purposes of this section:
(1) "Applicant" means a person who has made a written request for
an extension of credit which is proposed to be secured by real
property. The term does not include a guarantor, surety, or other
person who will not be directly liable on the loan.
(2) "Appraisal" shall have the same meaning as set forth in
subdivision (b) of Section 11302.
(3) "Residential real property" means real property located in the
State of California containing only a one-to-four family residence.
(b) A lender in a loan transaction secured by real property shall
provide notice as described in this section
mail or deliver a copy of an appraisal to a loan applicant
of the applicant's right to receive a copy of
within 15 days of receiving the appraisal, provided
he or she the applicant has paid for the
appraisal.
An applicant's written request for a copy of an appraisal must be
received by the lender no later than 90 days after (1) the lender has
provided notice of the action taken on the application, including a
notice of incompleteness, or (2) the application has been withdrawn.
(c) The lender shall mail or deliver a copy of an appraisal within
15 days after receiving a written request from the applicant, or
within 15 days after receiving the appraisal, whichever occurs later.
(d) Where the loan is proposed to be secured by residential real
property, the notice of the applicant's right to a copy of the
appraisal as provided in subdivision (b) shall be given in at least
10-point boldface type, as a separate document in a form that the
applicant may retain, and no later than 15 days after the lender
receives the written application. The notice shall specify that the
applicant's request for the appraisal must be in writing and must be
received by the lender no later than 90 days after the lender
provides notice of the action taken on the application or a notice of
incompleteness, or in the case of a withdrawn application, 90 days
after the withdrawal. An address to which the request should be sent
shall be specified in the notice. Release of the appraisal to the
applicant may be conditioned upon payment of the cost of the
appraisal.
(e) Where the loan is proposed to be secured by nonresidential
real property, the notice of the applicant's right to a copy of the
appraisal shall be given within 15 days of receiving the appraisal.
The notice shall specify that the applicant's request for a copy of
the appraisal must be in writing and that the request must be made
within the time specified in subdivision (b) and that the applicant
is only entitled to receive the appraisal or appraisals obtained by
the lender for the purpose of evaluating the applicant's pending
request for an extension of credit. Release of the appraisal to the
applicant may be conditioned upon payment of the cost of the
appraisal and the cost of duplicating the appraisal.
(f)
(c) Nothing in this section is intended to effect a
change in current law in any manner with respect to reliance on an
appraisal by anyone other than the lender who released the appraisal.
(g)
(d) This section does not apply to appraisals obtained
by lenders on property owned by the lender, nor to appraisals
obtained by the lender in anticipation of modifying any existing loan
agreement if the lender has not charged for the appraisal.
(h)
(e) In the case of loans secured by residential real
property, compliance with Regulation B (12 CFR
C.F.R. Part 202 et seq.) of the Federal Reserve Board is
deemed to be compliance with the provisions of this section and
Section 10241.3.
(i)
(f) This section is in addition to any right of access
to appraisals that exists under any other provision of state or
federal law.
SECTION 1. Section 11302 of the Business and
Professions Code is amended to read:
11302. For the purpose of applying this part, the following
terms, unless otherwise expressly indicated, shall mean and have the
following definitions:
(a) "Agency" means the Business, Transportation and Housing
Agency.
(b) "Appraisal" means a written statement independently and
impartially prepared by a qualified appraiser setting forth an
opinion in a federally related transaction as to the market value of
an adequately described property as of a specific date, supported by
the presentation and analysis of relevant market information, and as
valuated pursuant to at least one personal visit by the appraiser.
The term "appraisal" does not include an opinion given by a real
estate licensee or engineer or land surveyor in the ordinary course
of his or her business in connection with a function for which a
license is required under Chapter 7 (commencing with Section 6700) or
Chapter 15 (commencing with Section 8700) of Division 3, or Chapter
3 (commencing with Section 10130) or Chapter 7 (commencing with
Section 10500) and the opinion shall not be referred to as an
appraisal. This part does not apply to a probate referee acting
pursuant to Sections 400 to 408, inclusive, of the Probate Code
unless the appraised transaction is federally related.
(c) "Appraisal Foundation" means the Appraisal Foundation that was
incorporated as an Illinois not-for-profit corporation on November
30, 1987.
(d) "Appraisal Subcommittee" means the Appraisal Subcommittee of
the Federal Financial Institutions Examination Council.
(e) "Director" means the Director of the Office of Real Estate
Appraisers.
(f) "Federal financial institutions regulatory agency" means the
Federal Reserve Board, Federal Deposit Insurance Corporation, Office
of the Comptroller of the Currency, Office of Thrift Supervision,
Federal Home Loan Bank System, National Credit Union Administration,
the Resolution Trust Corporation, and any other agency determined by
the director to have jurisdiction over transactions subject to this
part.
(g) "Federally related real estate appraisal activity" means the
act or process of making or performing an appraisal on real estate or
real property in a federally related transaction and preparing an
appraisal as a result of that activity.
(h) "Federally related transaction" means any real estate-related
financial transaction which a federal financial institutions
regulatory agency engages in, contracts for or regulates and which
requires the services of a state licensed real estate appraiser
regulated by this part. This term also includes any transaction
identified as such by a federal financial institutions regulatory
agency.
(i) "License" means any license, certificate, permit,
registration, or other means issued by the office authorizing the
person to whom it is issued to act pursuant to this part within this
state.
(j) "Licensure" means the procedures and requirements a person
shall comply with in order to qualify for issuance of a license and
includes the issuance of the license.
(k) "Office" means the Office of Real Estate Appraisers.
() "Secretary" means the Secretary of the Business, Transportation
and Housing Agency.
(m) "State licensed real estate appraiser" is a person who is
issued and holds a current valid license under this part.
(n) "Uniform Standards of Professional Appraisal Practice" are the
standards of professional appraisal practice established by the
Appraisal Foundation.
(o) "Course provider" means a person or entity that provides
educational courses related to professional appraisal practice.
SEC. 2. Section 11324.5 is added to the
Business and Professions Code, to read:
11324.5. Notwithstanding Section 11324, the individual who is the
licensed appraiser shall make at least one personal visit to the
property that he or she is appraising. This duty may not be assigned
or delegated to any other person or employee of the appraiser.
SEC. 3. Section 1090.5 of the Civil Code is
amended to read:
1090.5. (a) No person with an interest in a real estate
transaction involving an appraisal shall improperly influence or
attempt to improperly influence, through coercion, extortion, or
bribery, the development, reporting, result, or review of a real
estate appraisal sought in connection with a mortgage loan.
(b) Subdivision (a) does not prohibit a person with an interest in
a real estate transaction from asking an appraiser to do any of the
following:
(1) Consider additional, appropriate property information.
(2) Provide further detail, substantiation, or explanation for the
appraiser's value conclusion.
(3) Correct errors in the appraisal report.
(c) (1) A person who prepares an appraisal in connection with the
making of any mortgage loan shall make at least one personal visit to
the property that he or she is appraising. This duty may not be
assigned or delegated to any other person or employee of the
appraiser.
(2) This subdivision shall apply to any person making an appraisal
sought in connection with any type of mortgage loan.
(d) If a person who violates this section is licensed under any
state licensing law and the violation occurs within the course and
scope of the person's duties as a licensee, the violation shall be
deemed a violation of that state licensing law.
(e) Nothing in this section shall be construed to authorize
communications that are otherwise prohibited under existing law.