Appraisal management regulation.

WORKING DRAFT
2012
STATE OF
WYOMING
12LSO-0325

HOUSE BILL
NO.
HB0086

Appraisal
m
anagement

r
egulation
.

Sponsored by:

Representative(s) Zwonitzer, Dv.

A BILL

for

AN ACT relating to
real estate appraisal; establishing the appraisal management company registration and regulation act as specified; providing rulemaking authority;
and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.

W.S. 33
‑
39
‑
201 through 33
‑
39
‑
2
23
are created to read:

ARTICLE 2
APPRAISAL MANAGEMENT COMPANY REGISTRATION AND REGULATION ACT

33
‑
39
‑
201.

Short title.

This
article
shall be known as the
"
Wyoming
Appraisal Management Company R
egistration and Regulation Act.
"

3
3
‑
39
‑
202.

Definitions.

(a)

As used in this
article:

(i)

"Appraisal"
means the act or process of developing an opinion of value of real pr
operty in conformance with the uniform standards of professional appraisal p
ractice
s
;

(ii)

"Appraisal management company"
means any corporation, partnership, sole proprietorship, subs
idiary, unit
or other business entity that:

(A)

Administers networks of independent contract appraisers to perform residential real estate
appraisal services for clients;

(B)

Receives requests for residential real estate appraisal services from clients and, for a fee paid by the client, enters into an agreement with one
(1)
or
more independent appraisers to perform the residential real estate appraisal services contained in the request; or

(C)

Otherwise serves as a third-party broker of residential appraisal management services between clients and appraisers.

(iii)

"Appraisal management services"
means the process of receiving a request for the performance of residential real estate appraisal services from a client, and for a fee paid by the client, entering into an agreement with one
(1)
or more independent appraisers to perform the real estate appraisal se
rvices contained in the request;

(iv)

"Appraiser"
means a person
who provides an opinion of the market v
alue of real property;

(v)

"
Appraiser fee sched
ule"
means a list of the various real estate appraisal services requested by an appraisal management company in this state from independent appraisers and the amount that the appraisal management company is willing to pay to an independent appraiser for
the performance of each of the listed real e
state appraisal services;

(vi)

"Appraiser panel"
means a group of independent appraisers that have been selected by an appraisal management company to perform residential real estate appraisal services for t
he appraisal management company;

(vii)

"Board"
means the
certified real estate appraiser board;

(viii)

"Client"
means any person or entity that contracts with, or otherwise enters into an agreement with, an appraisal management company for the performance of residential
real estate appraisal services;

(
ix)

"Controlling person" means
:

(A)

The
owner, officer or director of a corporation, partnership or other business entity seeking to offer appraisal manag
ement services in this state;

(B)

A
n
individual employed, appointed
or authorized by an appraisal management company that has the authority to enter into a contractual relationship with clients for the performance of appraisal management services and has the authority to enter into agreements with independent appraisers for the performance of residential real estate appraisal services; or

(C)

A
n individual who possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of an appraisal management company.

(x)

"Real estate appraisal services"
means the practice of developing an opinion of the value of real pr
operty in conformance with the uniform standards for
professional appraisal practice;

(xi)

"Uniform standards for professional appraisal practices" means as defined in W.S. 33
‑
1
‑
102(a)(xvi).

33
‑
39
‑
203.

Registration required
.

(a)

It is unlawful for a person, corporation, partnership, sole proprietorship, subsidiary, unit or any other business entity to directly or indirectly engage or attempt to engage in business as an appraisal management company, to directly or indirectly engage or attempt to perform appraisal management services, or to advertise or hold itself out as engaging in or conducting business as an appraisal management company without first obtainin
g a registration issued by the b
oard under the provisions of this
article
, regardless o
f the entity's use of the term "appraisal management company", "
mortgage technology company
" or any other name.

(
b)

The registration required by subsection (a) of this section shall, at a minimum, include the following information:

(i)

The
name
,
business address

and
phone contact
information
of the entity seeking registration;

(ii)

I
f the entity is not a corporation that is domiciled in this state, the name and contact information for the company’s agent for servi
ce of process in this state;

(iii)

T
he name, address
and contact information for any individual
or any corporation, partnership
or other business entity that owns
ten percent (
10%
)
or more of the appraisal management company;

(iv)

T
he name, address and contact information for a controlling person;

(v)

A
certification that the entity has a system and process in place to verify that a person being added to the appraiser panel of the appraisal management company holds a
permit
in good standing in this state pursuant to the
Certified Real Estate Appraiser Act
to perform appraisals
under that
act
;

(vi)

A
certification that the entity has a system in place to review the work of all independent appraisers that are performing real estate appraisal services for the appraisal management company on a periodic basis to ensure that the real estate appraisal services are bein
g conducted in accordance with uniform standards of professional appraisal p
ractice
s
;

(vii)

A
certification that the entity maintains a detailed record of each service request that it receives and the independent appraiser that performs the residential real estate appraisal services for the appraisal management company;

(viii)

An irrevocable uniform consent to service of p
rocess, pursu
ant to
W.S. 33
‑
39
‑
207
; and

(ix)

A
ny oth
er information required by the board.

33
‑
39
‑
204
.

Exemptions
.

(a)

This
article
shall not
apply
to:

(i)

A
ny corporation, partnership, sole p
roprietorship, subsidiary, unit
or other business entity that exclusively employs persons on an employer and employee basis for the performance of residential real estate appraisal services in the normal course of its business and the entity is responsible for ensuring that the residential real estate appraisal services being performed by its employees are bein
g performed in
accordance with uniform standards of professional appraisal p
ractice
s
;

(ii)

Any individual, corporation, partnership, sole p
roprietorship, subsidiary, unit
or other business entity who in the normal course of business enters into an agreement, whether written or otherwise, with another independent contractor appraiser for the performance of residential real estate appraisal services that the hiring or contracting appraiser cannot complete for any reason, including but not limited to competency, work load, schedule or geographic location;

(iii)

Any individual, corporation, partnership, sole p
roprietorship, subsidiary, unit
or other business entity who in the normal course of business enters into an agreement, whether written or otherwise, with an independent contractor appraiser for the performance of residential real estate appraisal services and upon the completion of the appraisal, the report of the appraiser performing the residential real estate appraisal services is cosigned by the appraiser who subcontracted with the independent appraiser for the performance of the residential
real estate appraisal services; or

(iv)

Any appraisal management company
that contract
s
with independent appraisers for the performance of less than ten (10) appraisals in this state in a
ny
calendar year.

33
‑
39
‑
205.

Forms.

An applicant for a registration as an apprai
sal management company in this state under this article shall submit to the b
oard an application on a form
as prescribed by the board.

33
‑
39
‑
206.

Expiration of license
.

A registration granted by the b
oard pursuant to this
article shall be valid for one (1)
year from the date on which it is issued.

33
‑
39
‑
207.

Consent to service of p
rocess.

Each entity applying for registration as an appraisal management company in this state
shall complete an
irrevocable "
uniform consent to service of p
rocess"
as prescribed by the b
oard.

33
‑
39
‑
208.

Fee
s
.

Pursuant to W.S.
33
‑
1
‑
201,
the b
oard shall establish by regulation the fee to be paid by each appraisal management company seeking registration under this
article
, but in no case shall the fee be more than five hundred dollars
($500.00)
.

33
‑
39
‑
209.

Owner r
equirements
.

(a)

No
appraisal management company
shall be eligible for
registration in this state
if the company has
more than
ten percent (
10%
)
owne
rship
by any person who has had a license or certificate to act as an appr
aiser refused, denied, cancel
l
ed
or revoked in this state or in any other state.

(b)

Each person that owns more than
ten percent (
10%
)
of an appraisal management company in this state shall:

(i)

B
e of good moral c
haracter, as determined by the b
oard;

(ii)

S
ubmit to a background inves
tigation, as determined by the board; and

(iii)

Certify to the b
oard that the person has never had a license to act as an appraiser refused, denied, cancelled, or revoked in th
is state or in any other state.

33
‑
39
‑
210.

Controlling p
erson.

Each appraisal mana
gement company applying to the b
oard for
registration in this state shall designate one
(1)
controlling person that will be the main contact for
all communication between the b
oard and th
e appraisal management company.

33
‑
39
‑
2
11
.

Controlling person; r
equirements.

(a)

In order to serve as a controlling person of an appraisal management company, a person
shall
:

(i)

Certify to the b
oard that the person has never had a certific
ate or a license issued by the b
oard of this state,
or the b
oard of any other state, to act as an appr
aiser refused, denied, cancel
l
ed
or revoked;

(ii)

Be of good moral c
haracter, as determined by the board; and

(iii)

Submit to a background inves
tigation, as determined by the board.

33
‑
39
‑
212.

E
mployee r
equirements
.

(a) Any employee of the appraisal management company, or any person working on behalf of the appraisal management company,
who
has the responsibility of selecting independent appraisers for the performance of residential real estate appraisal services for the appraisal management company or to review completed appraisals
shall
be appropriately trained and qualified in the performance of residential real estate a
ppraisals as determined by the board through rule and regulation
.

(
b)

Any employee of the appraisal management company that has the responsibility to review the work of independent appraisers
shall
have
demonstrated knowledge of the uniform standards of professional appraisal p
ractice
s, as determined by the b
oard
through rule and
regulation.

33
‑
39
‑
2
13.

Limitations.

An appraisal management company registered in this state pursuant to this
article shall
not enter into
any
contract or agreement with an independent appraiser for the performance of residential real estate appraisal services unless that person is certified in good standing pursuant to the
Certified Real Estate Appraiser Act
, W.S. 39-29-101 et seq
.

33
‑
39
‑
2
14.

Pre-engagement c
ertification.

Each appraisal management company seeking to be registered in t
his state shall certify to the b
oard on an annual bas
is on a form prescribed by the b
oard that the appraisal management company has a system and process in place to verify that a person being added to the appraiser panel of the appraisal management company holds a
permit
in good
standing in this state pursuant to the
Certified Real Estate Appraiser Act
, W.S. 39
‑
29
‑
101 et seq
.

33
‑
39
‑
2
15.

Adherence to
s
tandards.

Each appraisal management company seeking to be registered in t
his state shall certify to the b
oard on an annual basis that it has a system in place to review the work of all independent appraisers that are performing real estate appraisal services for the appraisal management company on a periodic basis to ensure that the real estate appraisal services are being
conducted in accordance with uniform standards of professional a
ppraisa
l p
ractice
s.

33
‑
39
‑
2
16.

Recordkeeping.

Each appraisal management company seeking to be registered in t
his state shall certify to the b
oard on an annual basis that it maintains a detailed record of each service request that it receives and the independent appraiser that performs the residential real estate appraisal services for the appraisal management company.

33
‑
39
‑
2
17.
Appraiser fee schedule.

(a)

An appraisal management company that applies for registration in th
is state shall disclose to the b
oard as part of the registration process if it has developed or utilizes any appraiser fee schedule.

(b)

An appraisal management company that applies for registration in this state and which utilizes any appraiser fee schedule shall develo
p the appraiser fee schedule
through one
(1)
or more surveys of the market rates being paid to independent fee appraisers in this state for the performance of real estate appraisal services.

(c)

A survey
p
erformed pursuant to subsection
(b) of this section shall be performed utilizing statistically
valid methodologies, techniques
and reliable data sources including representative samples of independent fee appraisers.

(d)

The b
oard may
,
in its discretion
,
review any appraiser fee schedule developed by an appraisal management company registered in this state to ensure that the fee schedule was developed pursuant to the requirements of subsection
s (b)
and (c) of this section.

(e)

Upon a formal request of the b
oard, an appraisal management company that utilizes any appraiser fee
schedule shall disclose to the b
oar
d the methodologies, techniques
and data sources that were utilized to determine the amounts listed on the schedules.

(f)

Following a review of any fee schedule conducted pursuant to subsection
s (d) and (e) of this section, the b
oard shall make the substantive results of the review available to the public.

33
‑
39
‑
218.

Appraiser independence; prohibitions.

(a)

It shall be unlawful for
any employee, director, officer
or agent of an appraisal management company registered in this state pursuant to this chapter to influence or attempt to influ
ence the development, reporting
or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery or in any other manner, including but not limited to:

(i)

W
ithholding or threatening to withhold timely payment for an appraisal;

(ii)

W
ithholding or threatening to withhold future business for an independent appraiser, or demoting or terminating or threatening to demote or terminate an independent appraiser;

(iii)

E
xpressly or impliedly promising future business, promotions or increased compensation for an independent appraiser;

(iv)

C
onditioning the request for an appraisal service or the payment of an appraisal fee or salary or bonus on the opinion, conclusion or valuation to be reached, or on a preliminary estimate or opinion requested from an independent appraiser;

(v)

R
equesting that an independent appraiser provide an estimated, predetermined or desired valuation in an appraisal report, or provide estimated values or comparable sales at any time prior to the independent appraiser’s completion of an appraisal service;

(vi)

P
roviding to an independent appraiser an ant
icipated, estimated, encouraged
or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase transactions may be provided;

(vii)

P
roviding to an independent appraiser, or any entity or person related to the appraiser, stock or other financial or nonfinancial benefits;

(viii)

A
llowing the removal of an independent appraiser from an appraiser panel, without prior written notice to such appraiser;

(ix)

Obtaining, using
or paying for a second or subsequent appraisal or ordering an automated valuation model in connection with a mortgage financing transaction unless there is a reasonable basis to believe that the initial appraisal was flawed or tainted and
the
basis is clearly and appropriately noted in the loan file, or unless such appraisal or automated valuation model is d
one pursuant to a bona fide prefunding or post-
funding appraisal review or quality control process; or

(x)

A
ny other act or practice that impairs or attempts to impair an apprai
ser’s independence, objectivity
or impartiality.

(b)

Nothing in subsection (a) of this section shall be construed as prohibiting the appraisal management company from requestin
g that an independent appraiser:

(i)

Provide additional information about the basis for a valuation; or

(ii)

Correct objective factual errors in an appraisal report.

33
‑
39
‑
2
19.

Guaranty of p
ayment
.

Each appraisal management company operating in this state shall, except in cases of breach of contract or substandard performance of services, make payment to an independent appraiser for the completion of an appraisal or valuation assignment within sixty (60) days of the date on which the independent appraiser transmits or otherwise provides the completed appraisal or valuation study to the appraisal management company or its assignee.

33
‑
39
‑
2
20.

Alteration of appraisal reports.

An appraisal managemen
t company may not alter, modify
or otherwise change a completed appraisal report submitted by an independent appraiser.

33
‑
39
‑
2
21.

Adjudication of disputes between an appraisal management company and an independent a
ppraiser.

(a) Except within the first thirty (30 days) after an independent appraiser is first added to the appraiser panel of an appraisal management company, an appraisal management company may not remove an app
raiser from its appraiser panel
or otherwise refuse to assign requests for real estate appraisal services to an independent appraiser without:

(i)

Notifying the appraiser in writing of the reasons why the appraiser is being removed from the appraiser panel of th
e appraisal management company;

(ii)

If the appraiser is being removed from the panel for ill
egal conduct, violation of the uniform
standards of professional appraisal p
ractice
s
or a violation of state licensing standards, the nature of the alleged conduct or violation;
and

(iii)

Providing an opportunity for the appraiser to respond to the notification of the appraisal management company.

(
b)

An appraiser that is removed from the appraiser panel of an appraisal management company for alleged ill
egal conduct, violation of the uniform standards of professional a
ppr
aisal practice
or violation of state licensing standards
, may file a complaint with the board

for a review of the decision of the appraisal management company, ex
cept that in no case shall the b
oard make any determination regarding the nature of the business relationship between the appraiser and the appraisal management company which is unrelated to the actions specified in subsection (a) of this section.

(
c)

If an appraiser files a complaint against an appraisal management company pursuant to subse
ction (b) of this section, the b
oard shall adjudicate the complaint within
one hundred eighty (
180
)
days.

(d)

If
,
after opportuni
ty for hearing and review, the b
oard determines that an appraiser did not commit a violat
ion of law, a violation of the uniform standards of professional appraisal p
ractice
s
or a violation of
state licensing standards, the b
oard shall order that an appraiser be added to the appraiser panel of the appraisal management company that was the subject of the complaint without prejudice.

(e)

Following the adju
dication of a complaint to the b
oard by an appraiser against an appraisal management company, an appraisal management company may not refuse to make assignments for real estate appraisal services to an appraiser, or r
educe the number of assignments
or otherwise
penalize the appraiser, if the b
oard has found that the appraisal management company acted improperly in removing the appraiser from the appraiser panel.

33
‑
39
‑
2
22.

Enforcement
.

(a)

The b
oard may censure an appraisal management company, conditionally or unconditionally suspend or revoke any
registration issued under this article
, levy fines or
impose civil pena
lties not to exceed twenty-five t
housand dollars
($25,000.00)
if
,
in the opinion of the board, an appraisal management company is attem
pting to perform, has performed
or has attempted to perform any of the following acts:

(i)

Committing any act in violation of this chapter;

(ii)

Violating any rule or regulation adopted by the board in the interest of the public and consistent with the provisions of this chapter;

(iii)

Procuring a license for himself or anyone e
lse by fraud, misrepresentation or deceit.

33
‑
39
‑
2
23.

Disciplinary hearings.

(a)

The conduct of adjudicatory proc
eedings in accordance with the Wyoming Administrative Procedure A
ct for violations of this
chapter is vested in the b
oard, such that:

(i)

Before censuring any registrant, or suspending or revoking any registration, the board shall notify the registrant in writing of any charges made at least twenty
(20)
days prior to the date set for the hearing and shall afford the registrant an opportunity to be
heard in person or by counsel
;

(ii)

The written notice shall be satisfied by personal service on the controlling person of the registrant, the registrant’s agent for s
ervice of process in this state
or by sending the notice by certified mail, return receipt requested to the controlling person of the registrant to the registrant’s
address on file with the board;

(iii)

The hearing on the charges shall be at a time and place prescribed by the board and in accordance with the
Wyoming Administrative Procedure Act;

(iv)

The b
oard may make findings of fact and shall deliver or mail such findings to the registrant charged with an offense under this
article.

S
ection 2.

W.S. 33
‑
39
‑
105(a) by creating a new paragraph (x) is amended to read:

33-39-105.

Powers of the board; rulemaking authority.

(a)

The board shall:

(x)

Promulgate rules and regulations to implement, administer and enforce the
Wyoming
Appraisal Management Company Registration and Regulation Act
under W.S. 33
‑
39
‑
201 through 33
‑
39
‑
223.

Section 3
.

This act is effective July 1, 2012.

(END)

1
HB0086