Apellas Vendor Voice Post - Apella Discontinues Utah

post from TABLE TALK WITH APELLA on 17 July 2009 02:56:52 AM. © TABLE TALK WITH APELLA

The State of Utah Department of Commerce Division of Real Estate has sent Apella Real Estate Business Solutions a letter dated June 16^th, 2009 informing that Appraisal Management Companies (AMC?s) now must be registered with the Utah State Division of Real Estate Effective as of May 12, 2009. Apella has temporarily halted any operations in Utah upon compliance? pending economical cost. Apella is in communications with the State of Utah in order to begin the compliance process.

This is a Great Victory for Appraisers and the Appraisal Institute. State of Utah House Bill 152 is a great Protectionist bill allowing a state an additional income stream and lacking the addressing of the downfalls. So typical, yet the bill has set forth standards that some Apella must incorporate and some that will sure to be incorporated across the board. While there are good intentions in the bill, in the end the bill stifles competition and gives no incentive for upcoming small business? just as sure as it was designed to do. Appraisers pushed for regulation to ?even? the playing field and now the appraisal industry has just that.

While very little was covered on the subject other than a statement by the Appraisal Institute and the National Association of Realtors, Apella has anticipated these actions. Currently Utah and Arkansas have passed bills that coincide with the creation of HVCC. HVCC has produced a wonderful new income stream for states that is sure to be ?tapped? fully? regulation does provide for opportunity to some degree.

As a company Apella has anticipated these actions, yet these two states have moved very quickly while as a company Apella has completed policy for HVCC. Regulation compliance is costly in money, time and resources rather for new instated regulation or maintenance of current regulation. This cost is almost always passed onto the consumer. Currently Apella is evaluating the potential cost to the vendor.

Per the bill passed eleven days after HVCC took effect, State of Utah House Bill 152, several items must be completed in order for AMC?s to conduct business in the State of Utah.

1. Should the AMC be a foreign entity, then the AMC must first register with the commercial division as an out of state business doing business in the state.

2. Should the AMC be a foreign entity then the right to serve over state lines must be given to the State of Utah and the State of Utah becomes the entities representative in the State of Utah.

3. The AMC must submit two (2) sets of finger prints for all owners or controlling parties that hold more than 10% ownership ($35.00 fee for each set of prints - FBI).

4. AMC registration is good for two (2) years unless the State deems something other on a case by case need.

5. AMC registration fee is a non refundable $350.00 dollars. State fees for a company to file foreign entity have not been found so at this time a phone call will need to be made.

6. Upon registration the AMC must report a filing of personal bankruptcy or bankruptcy of a business that transacts the appraisal management services.

7. AMC?s must disclose to clients the fee being paid to appraisers before receiving payment for the appraisal order in dollar amount or percentage amount.

8. AMC staff that selects appraisers or performs appraisal reviews must be trained in USPAP 15 hour class.

9. Post 30 days of being added to an AMC member roster an AMC cannot remove an appraiser other than for illegal conduct or a violation of the applicable appraisal standards and must give the appraiser reply time.

10. AMC cannot use Automated Value Assessments (AVMs) or order subsequent appraisals other then when standards were not meet or for appraisal review quality control.

House Bill 152 covers several areas that have been covered here on Table Talk With Apella. Several of the areas that the bill addresses are true concerns for the industry. There are a few exceptions to the bill one being if the AMC does less than ten (10) orders per year and the other for appraisers who reassign appraisal orders to other appraisers licensed to do appraisals in the state. The latter is an unfair playing field exception. The bill does not alter the use of BPOs by lenders as it only covers Appraisal Management Companies and appraisers who ?outsource?.

Currently the effect is still being analyzed by Apella and the development in policy will become the highest priority. Apella will be contacting its vendors and those applying on the issue in the very near future.

Until the next post, thanks for reading and please stay tuned to future developments.