Appraisal companies regulated

Appraisal management companies are becoming more common in Minnesota, and a bill headed to the House floor would regulate the growing industry.

Appraisal management companies offer real estate appraisal services through a business organization rather than individual appraisers. Wendy Walker, president of the North Star chapter of the Appraisal Institute, said their use is growing both statewide and nationally.

Walker said AMCs are becoming more popular because of the adoption of the Home Valuation Code of Conduct by government-sponsored mortgage buyer Freddie Mac. She said the idea is to keep lenders separated from appraisers by having a third party administer the appraisals.

However, Walker said the growth of the industry has led to issues such as appraisers losing their licenses and then turning around and starting an AMC.

Sponsored by Rep. Al Juhnke (DFL-Willmar), HF3122 would regulate the industry, establish licensing requirements and fees, and put AMCs under the purview of the Commerce Department.

The House Commerce and Labor Committee approved the bill March 16 and sent it to the House floor.

Timothy O’Brien, representing the Title/Appraisal Management Association, said the industry supports the bill, calling it a “reasonable” proposal that “supports the best interests of our industry.”

A companion, SF3043, sponsored by Sen. Ray Vandeveer (R-Forest Lake), has been laid over for possible omnibus inclusion by the Senate Economic Development and Housing Budget Division.