BILL ANALYSIS
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|Hearing Date:April 20, 2009 |Bill No:SB |
| |633 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 633Author:Wright
As Amended:April 13, 2009 Fiscal: Yes
SUBJECT: Real estate appraisers.
SUMMARY: Requires a lender in a loan transaction that is proposed
to be secured by real property to mail or deliver a copy of an
appraisal to a loan applicant within 15 days of receiving the
appraisal, provided the applicant has paid for the appraisal,
rather than requiring a written request from the loan applicant
for a copy of the appraisal.
Existing law:
1)Provides for the licensure and regulation of real estate
appraisers by the Office of Real Estate Appraisers (REA Office)
and vests the duty of enforcing and administering the Real
Estate Appraisers' Licensing and Certification Law in the
Director of the REA Office and provides that the REA Office is
under the supervision and control of the Secretary of the
Business, Transportation and Housing Agency (BT&H).
2)Defines "appraisal" as 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.
3)Provides that a loan applicant who has made a written request
for an extension of credit which is proposed to be secured by
real property shall receive from the lender a copy of the
appraisal if paid for and requested by the applicant.
4)Specifies the conditions under which: (1) notice is to be given
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to the loan applicant of their right to receive a copy of the
appraisal; and, (2) the applicant's written request is to be
made to the lender.
5)Provides that the lender shall mail or deliver a copy of the
appraisal within
15 days after receiving a written request from the loan applicant,
or within 15 days after receiving the appraisal, whichever
occurs later.
This bill would require a lender in a loan transaction to mail or
deliver a copy of an appraisal to a loan applicant within 15 days
of receiving the appraisal, provided the applicant has paid for
the appraisal, rather than requiring a written request from the
loan applicant for a copy of the appraisal.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This measure is sponsored by the Author. According to
the Author, the applicant is the one paying for the appraisal.
By automatically sending them a copy it would increase
transparency in the process and allow them to see how the worth
of their property was determined. The Author states that there
is a lot of paperwork associated with housing and a notice of a
right to request can get lost or overlooked. This is a simple
step that will increase consumer protections in the currently
volatile housing market.
2.Related Legislation. SB 237 (Calderon) would create a
registration program for "appraisal management companies"
(AMCs), as defined, within the Office of Real Estate Appraisers,
and would require AMCs to meet similar existing licensing
program requirements for independent appraisers. Would also
specify and clarify prohibited acts by AMCs as well as others
who have an interest in a real estate transaction involving an
appraisal. This measure was heard in this Committee on April
13, 2009, and passed out of Committee by a vote of 8 to1. It
has been re-referred to the Senate Appropriations Committee.
SB 223 (Machado, Chapter 281, Statutes of 2007) provides that 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
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development, reporting, result, or review of a real estate
appraisal sought in connection with a mortgage loan, and also
specifies permissible acts which can be requested of an
appraiser by a person with an interest in a real estate
transaction.
SUPPORT AND OPPOSITION:
Support:
None Received as of April 15, 2009.
Opposition:
None Received as of April 15, 2009.
Consultant:Bill Gage