A: The federal government mandated a change in appraising properties by lenders as one action in an effort to prevent another massive mortgage lending meltdown in the future. To control the lending practices the change dictated the formation of Appraisal Management Companies (AMC) nationwide to perform the appraisal function for lenders. This action also removed local appraisers knowledgeable of the local neighborhoods and market conditions in the local real estate market from selection by lenders. Lenders now must use the AMC’s.
The recent adoption of the federal Home Valuation Code of Conduct (HVCC) has resulted in an explosive growth of appraisal management companies (AMC) which now largely control the appraisal process. These companies are currently unregulated under California law.
The California Association of Realtors (C.A.R.) supports State regulation of these Appraisal Management Companies operating in California. State SB Bill 237 would bring AMC’s under the supervision of the Office of Real Estate Appraisers (OREA) and require that they operate under California’s Real Estate Appraiser law and regulations.
