CT Value
Sophomore Member
- Joined
- Sep 27, 2005
- Professional Status
- Certified Residential Appraiser
- State
- Connecticut
The following story was written by Mary Ellen Godin and published in the Meriden Record Journal on 07/24/2008.
Since we don't have any formal Real Estate Appraisers Association here in Connecticut I thought that it might be a good idea for appraisers who live outside of the Record Journal's circulation area to notify their local newspaper in an effort to have a story written about the new appraisal legislation aka Section 14 of HB5577 http://www.cga.ct.gov/2008/TOB/H/2008HB-05577-R00-HB.htm
These types of stories create awareness to appraisers about the new law as well as help educate and inform the general public and mortgage industry.
Rob Clermont
Law aims to end influence on appraisers
By Mary Ellen Godin
Record-Journal staff
MERIDEN — Mortgage brokers and real estate agents can no longer try to influence an appraiser’s property valua*tion, because of a new state law that went into effect July 1.
The law makes it illegal for appraisers to allow their valua*tion to be influenced. It also al*lows the state departments of Consumer Protection and Banking to enforce the measure through fines or license sus*pensions. The law was part of a larger package addressing re*sponsible lending and econom*ic security.
“I feel good about it,” said Robert Clermont, who owns Value Quest Appraisal. “Hope*fully it will reduce pressure put on appraisers.”
Clermont testified for the law because the practice has di*rectly contributed to artificially high housing prices and the painful market correction now under way, he said. The law may also protect honest ap*praisers from being blacklisted for not reaching a specific val*ue, he said.
“Absolutely without a doubt it’s prevalent,” Clermont said. “With a lack of enforcement, it became almost commonplace for lenders to ask appraisers to arrive at an expected value. Those who say no, your busi*ness suffers.”
Under the new law, if an ap*praiser receives a lender re*quest that has any hint of a spe*cific value, it can be sent to the Department of Banking for a possible fine up to $1,000 per occurrence and/or license sus*pension.
Homebuyers can also tell their lender not to shop for an appraiser and demand an hon*est valuation. Clermont has even notified homebuyers that a lender is value shopping.
“The homeowner is usually grateful,” Clermont said. “The broker will call me back yelling and screaming.”
State Rep. Emil “Buddy” Al*tobello, D-Meriden, is a mem*ber of the Real Estate and In*surance Committee. With a background in real estate, Alto*bello is familiar with the prac*tice the law addresses.
“From what Rob testified, people are not just trying to in*fluence, they were saying your employment depends on what your appraisal is coming out at,” Altobello said. “This allows the real estate and banking commissions to clamp down on these activities.”
Appraisers are licensed through the state Department of Consumer Protection and lenders through the state De*partment of Banking. The agen*cies are prepared to work to*gether to enforce the laws.
“We want our appraisal sys*tem in Connecticut to be spot*less,” said Jerry Farrell Jr., com*missioner of the state Department of Consumer Pro*tection. “There are some out*of- state lenders that could be better apprised of the rules. This helps the Department of Banking to tell those institu*tions to knock it off.”
Farrell said the laws aren’t new to his department, and the state’s appraisal system is au*dited by the federal govern*ment. The practice of influenc*ing real estate values isn’t rampant, he said, but he is will*ing to work closely with the state Banking Department to ferret out abuses.
Clermont said problems are egregious on the lender side, with mortgage brokers more blatant than banks. Out-of-state mortgage brokers can be par*ticularly troublesome, because they shop for values until they get an appraiser that will deliv*er.
Clermont would like to see more laws mandating that out*of- state brokers be licensed to operate in the state before they lend money here.
“We’re making sure the val*ue of the property is sufficient to collateralize the loan,” Cler*mont said. “But when mortgage brokers, appraisers and agents don’t play by the rules, then our current housing situation is the consequence and everybody pays for it.”
mgodin@record-journal.com (203) 317-2255
Since we don't have any formal Real Estate Appraisers Association here in Connecticut I thought that it might be a good idea for appraisers who live outside of the Record Journal's circulation area to notify their local newspaper in an effort to have a story written about the new appraisal legislation aka Section 14 of HB5577 http://www.cga.ct.gov/2008/TOB/H/2008HB-05577-R00-HB.htm
These types of stories create awareness to appraisers about the new law as well as help educate and inform the general public and mortgage industry.
Rob Clermont
Law aims to end influence on appraisers
By Mary Ellen Godin
Record-Journal staff
MERIDEN — Mortgage brokers and real estate agents can no longer try to influence an appraiser’s property valua*tion, because of a new state law that went into effect July 1.
The law makes it illegal for appraisers to allow their valua*tion to be influenced. It also al*lows the state departments of Consumer Protection and Banking to enforce the measure through fines or license sus*pensions. The law was part of a larger package addressing re*sponsible lending and econom*ic security.
“I feel good about it,” said Robert Clermont, who owns Value Quest Appraisal. “Hope*fully it will reduce pressure put on appraisers.”
Clermont testified for the law because the practice has di*rectly contributed to artificially high housing prices and the painful market correction now under way, he said. The law may also protect honest ap*praisers from being blacklisted for not reaching a specific val*ue, he said.
“Absolutely without a doubt it’s prevalent,” Clermont said. “With a lack of enforcement, it became almost commonplace for lenders to ask appraisers to arrive at an expected value. Those who say no, your busi*ness suffers.”
Under the new law, if an ap*praiser receives a lender re*quest that has any hint of a spe*cific value, it can be sent to the Department of Banking for a possible fine up to $1,000 per occurrence and/or license sus*pension.
Homebuyers can also tell their lender not to shop for an appraiser and demand an hon*est valuation. Clermont has even notified homebuyers that a lender is value shopping.
“The homeowner is usually grateful,” Clermont said. “The broker will call me back yelling and screaming.”
State Rep. Emil “Buddy” Al*tobello, D-Meriden, is a mem*ber of the Real Estate and In*surance Committee. With a background in real estate, Alto*bello is familiar with the prac*tice the law addresses.
“From what Rob testified, people are not just trying to in*fluence, they were saying your employment depends on what your appraisal is coming out at,” Altobello said. “This allows the real estate and banking commissions to clamp down on these activities.”
Appraisers are licensed through the state Department of Consumer Protection and lenders through the state De*partment of Banking. The agen*cies are prepared to work to*gether to enforce the laws.
“We want our appraisal sys*tem in Connecticut to be spot*less,” said Jerry Farrell Jr., com*missioner of the state Department of Consumer Pro*tection. “There are some out*of- state lenders that could be better apprised of the rules. This helps the Department of Banking to tell those institu*tions to knock it off.”
Farrell said the laws aren’t new to his department, and the state’s appraisal system is au*dited by the federal govern*ment. The practice of influenc*ing real estate values isn’t rampant, he said, but he is will*ing to work closely with the state Banking Department to ferret out abuses.
Clermont said problems are egregious on the lender side, with mortgage brokers more blatant than banks. Out-of-state mortgage brokers can be par*ticularly troublesome, because they shop for values until they get an appraiser that will deliv*er.
Clermont would like to see more laws mandating that out*of- state brokers be licensed to operate in the state before they lend money here.
“We’re making sure the val*ue of the property is sufficient to collateralize the loan,” Cler*mont said. “But when mortgage brokers, appraisers and agents don’t play by the rules, then our current housing situation is the consequence and everybody pays for it.”
mgodin@record-journal.com (203) 317-2255