The nation’s largest professional organizations of real estate appraisers have set forth a list of business-related principles that they say appraisal management companies should adopt and advocate. The exposure draft of “Appraiser and Management Company Statement of Principles,” released March 11, is open for comment and discussion from all stakeholders through May 1.CLICK HERE for a pdf copy of the draft Statement of Principles.
“Adherence to these principles will help ensure that quality appraisals are prepared by competent appraisers for financial institutions and other clients in a timely manner,” Appraisal Institute President Leslie Sellers, MAI, SRA, said.
“Agreement with these principles will promote equality and a mutually beneficial relationship between professional appraisers and the AMCs using their services,” said Mike Evans, FASA, president of the American Society of Appraisers. “Most importantly, adherence to these principals will ensure consumers are protected, and safety and soundness fostered, when lenders use AMCs for valuation services.”
The statement is a joint effort of the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers.
Following the public comment period, the professional appraisal organizations will request that AMCs formally adopt the revised Statement of Principles and agree to comply with them in their interactions with appraisers, their clients and consumers, according to Sellers.
After adoption, the appraisal organizations will continue to work with all stakeholders, including the AMC community, to provide further clarification of each of the principles through such means as guidance documents and responses to frequently asked questions, Sellers said. The Statement of Principles is intended to evolve as the AMC industry continues to mature, and state and federal laws applicable to AMCs continue to be enacted and implemented, he added.
“The organizations look forward to working with AMCs, state boards, local chapters and consumer groups as the business practices of AMCs are refined to comply with the principles. The principles are intended to promote mutually beneficial business relationships between management companies and professional appraisers,” Sellers said.
In 2008, the professional appraisal organizations drafted and released model legislation for the registration and regulation of appraisal management companies. Laws based upon this model legislation have been considered by at least 25 states, with 10 states passing the bills – some of which await enactment – and the rest still under consideration.
Since the TAVMA folks have been free and easy with their advice to the appraisal community, it will be interesting to see their reaction to this proposal.