A5403-2011 Actions

• Mar 9, 2011: enacting clause stricken
• Feb 18, 2011: referred to judiciary

A5403-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         5403
 2011-2012 Regular Sessions
 I N  ASSEMBLY
 February 18, 2011
 
 Introduced  by M. of A. TOWNS -- read once and referred to the Committee
 on Judiciary
 

AN ACT to amend the executive law, in relation to ensuring the accuracy,
 independence,  objectivity  and   impartiality   of   appraisers   and
 appraisals  of real estate that serve as collateral for loans on resi
 dential property
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1.  Short  title. This act shall be known and may be cited as
 the "independent home valuation act".
 

S 2. The executive law is amended by adding a new section 160-aa-1  to
 read as follows:

 

S  160-AA-1.  INDEPENDENT HOME VALUATION.   1. DEFINITIONS. AS USED IN
 THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:

 (A) "APPRAISER" SHALL MEAN ANY STATE CERTIFIED REAL ESTATE  APPRAISER,
 STATE  LICENSED  REAL  ESTATE  APPRAISER,  STATE  LICENSED  REAL  ESTATE
 APPRAISER ASSISTANT, APPRAISAL MANAGEMENT  COMPANY  OR  EMPLOYEE  OF  AN
 APPRAISAL MANAGEMENT COMPANY.
 (B)  "APPRAISAL"  SHALL  MEAN  ANY  APPRAISAL,  REAL ESTATE APPRAISAL,
 CERTIFIED APPRAISAL, CERTIFIED  APPRAISAL  REPORT,  LICENSED  APPRAISAL,
 LICENSED  APPRAISAL  REPORT  OR APPRAISAL ASSIGNMENT WITH RESPECT TO THE
 VALUE OF REAL ESTATE THAT IS TO BE COVERED BY A RESIDENTIAL LOAN  OR  IS
 BEING  OFFERED AS SECURITY ACCORDING TO AN APPLICATION FOR A RESIDENTIAL
 LOAN.
 (C) "BORROWER" SHALL MEAN ANY INDIVIDUAL OBLIGATED TO REPAY A RESIDEN
 TIAL LOAN, INCLUDING A COBORROWER, COSIGNER OR GUARANTOR.
 (D) "RESIDENTIAL LOAN" SHALL MEAN A LOAN SECURED BY A MORTGAGE OR DEED
 OR TRUST ON REAL ESTATE USED FOR RESIDENTIAL PURPOSES.
 (E) "PERSON" SHALL MEAN ANY PERSON, ENTITY, FIRM,  CORPORATION,  PART
 NERSHIP OR ASSOCIATION OR AGENT OR EMPLOYEE THEREOF.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD09614-01-1
 
       A. 5403                             2
 2.  PROHIBITION  AGAINST FALSE AND MISLEADING APPRAISALS. NO APPRAISER
 SHALL MAKE, DIRECTLY OR INDIRECTLY, ANY FALSE, DECEPTIVE  OR  MISLEADING
 STATEMENT OR REPRESENTATION IN CONNECTION WITH AN APPRAISAL.
 3.  PROHIBITION  AGAINST  IMPROPERLY  INFLUENCING AN APPRAISAL. (A) NO
 PERSON SHALL INFLUENCE OR ATTEMPT TO INFLUENCE THE DEVELOPMENT,  REPORT
 ING, RESULT, OR REVIEW OF AN APPRAISAL THROUGH BRIBERY, COERCION, COLLU
 SION,  COMPENSATION, EXTORTION, INDUCEMENT, INSTRUCTION, INTIMIDATION OR
 IN ANY OTHER MANNER, INCLUDING, BUT NOT LIMITED TO:

 (I) WITHHOLDING OR THREATENING  TO  WITHHOLD  TIMELY  PAYMENT  FOR  AN
 APPRAISAL REPORT;
 (II)  WITHHOLDING  OR  THREATENING  TO WITHHOLD FUTURE BUSINESS FOR AN
 APPRAISER, OR DEMOTING OR TERMINATING OR THREATENING TO DEMOTE OR TERMI
 NATE AN APPRAISER;
 (III) EXPRESSLY OR IMPLIEDLY PROMISING FUTURE BUSINESS, PROMOTIONS, OR
 INCREASED COMPENSATION FOR AN APPRAISER;
 (IV) CONDITIONING THE ORDERING OF AN APPRAISAL REPORT 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 REQUESTED FROM  AN
 APPRAISER;
 (V)  REQUESTING THAT AN 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 APPRAISER'S  COMPLETION  OF
 AN APPRAISAL REPORT;
 (VI)  PROVIDING TO AN APPRAISER AN ANTICIPATED, 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)  PROVIDING  TO  AN  APPRAISER  OR  ANY  PERSON  RELATED  TO  THE
 APPRAISER, STOCK OR OTHER FINANCIAL OR NON-FINANCIAL BENEFITS;
 (VIII)  ALLOWING  THE REMOVAL OF AN APPRAISER FROM A LIST OF QUALIFIED
 APPRAISERS USED BY ANY ENTITY, WITHOUT  PRIOR  WRITTEN  NOTICE  TO  SUCH
 APPRAISER,   WHICH   NOTICE   SHALL  INCLUDE  WRITTEN  EVIDENCE  OF  THE
 APPRAISER'S ILLEGAL CONDUCT, A VIOLATION OF  THE  UNIFORM  STANDARDS  OF
 PROFESSIONAL  APPRAISAL  PRACTICE  (USPAP) OR STATE LICENSING STANDARDS,
 SUBSTANDARD PERFORMANCE, OR OTHERWISE IMPROPER OR UNPROFESSIONAL  BEHAV
 IOR;
 (IX)  ORDERING, OBTAINING, USING, OR PAYING FOR A SECOND OR SUBSEQUENT
 APPRAISAL OR 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 SUCH BASIS IS CLEARLY
 AND APPROPRIATELY NOTED IN THE LOAN FILE, OR UNLESS  SUCH  APPRAISAL  OR
 AUTOMATED VALUATION MODEL IS DONE PURSUANT TO A BONA FIDE PRE-FUNDING OR
 POST-FUNDING APPRAISAL REVIEW OR QUALITY CONTROL PROCESS; OR
 (X)  ANY  OTHER  ACT OR PRACTICE THAT IMPAIRS OR ATTEMPTS TO IMPAIR AN
 APPRAISER'S INDEPENDENCE, OBJECTIVITY, OR IMPARTIALITY.
 (B) THE REQUIREMENTS OF PARAGRAPH (A) OF THIS SUBDIVISION SHALL NOT BE
 CONSTRUED AS PROHIBITING A PERSON FROM ASKING AN APPRAISER TO DO ANY  OF
 THE FOLLOWING:

 (I)  PROVIDE ADDITIONAL INFORMATION OR EXPLANATION ABOUT THE BASIS FOR
 AN APPRAISER'S VALUATION; AND
 (II) CORRECT OBJECTIVE FACTUAL ERRORS IN AN APPRAISAL REPORT.
 4. PROHIBITION AGAINST IMPROPER APPRAISAL. NO APPRAISER SHALL  PERFORM
 OR  PROVIDE AN APPRAISAL INFLUENCED BY CONDUCT PROHIBITED UNDER SUBDIVI
 SION THREE OF THIS SECTION.
 
       A. 5403                             3
 5. PROHIBITION ON CONFLICTS OF INTEREST. NO  APPRAISER  CONDUCTING  AN
 APPRAISAL  MAY  HAVE  A DIRECT OR INDIRECT INTEREST, FINANCIAL OR OTHER
 WISE, IN THE PROPERTY OR TRANSACTION INVOLVING AN APPRAISAL.
 6.  PROHIBITION AGAINST IMPROPER SELECTION OF APPRAISER. (A) NO PERSON
 COMPENSATED ON A COMMISSION BASIS UPON THE SUCCESSFUL  COMPLETION  OF  A
 REAL  ESTATE  TRANSACTION  INVOLVING  A  RESIDENTIAL  LOAN SHALL SELECT,
 RETAIN, RECOMMEND OR INFLUENCE THE  SELECTION  OF  AN  APPRAISER  FOR  A
 PARTICULAR  APPRAISAL  ASSIGNMENT OR FOR INCLUSION ON A LIST OR PANEL OF
 APPRAISERS APPROVED TO PERFORM APPRAISALS.
 (B) NO APPRAISER SHALL KNOWINGLY  ALLOW  THEMSELVES  TO  BE  SELECTED,
 RETAINED  OR  RECOMMENDED  FOR  A PARTICULAR APPRAISAL ASSIGNMENT OR FOR
 INCLUSION  ON  A  LIST  OR  PANEL  OF  APPRAISERS  APPROVED  TO  PERFORM
 APPRAISALS  BY  A  PERSON  COMPENSATED  ON  A  COMMISSION BASIS UPON THE
 SUCCESSFUL COMPLETION OF A REAL ESTATE TRANSACTION.
 7. MANDATORY REPORTING. ANY PERSON HOLDING A LICENSE, CERTIFICATION OR
 THE LIKE ISSUED BY THE DEPARTMENT OF STATE OR THE BANKING DEPARTMENT, OR
 ANY OTHER PERSON WITH AN INTEREST IN A REAL ESTATE TRANSACTION INVOLVING
 AN APPRAISAL WHO HAS A REASONABLE  BASIS  TO  BELIEVE  AN  APPRAISER  IS
 VIOLATING  APPLICABLE  LAWS,  OR  IS  OTHERWISE  ENGAGING  IN  UNETHICAL
 CONDUCT, SHALL REPORT TO THE APPROPRIATE  DEPARTMENT  AND  THE  ATTORNEY
 GENERAL EVIDENCE OF ANY VIOLATION OF THIS SECTION.
 8.  SANCTIONS.  (A) A VIOLATION OF THIS SECTION IS A GROUND FOR DISCI
 PLINE AGAINST ANY PERSON HOLDING A LICENSE, CERTIFICATION  OR  THE  LIKE
 ISSUED  BY A STATE AGENCY, IF THE PRACTICE OF THE PROFESSION, OCCUPATION
 OR BUSINESS REGULATED BY SUCH LICENSE, CERTIFICATION OR THE LIKE RELATES
 TO REAL ESTATE TRANSACTIONS.
 (B) ANY PERSON OTHER THAN A BORROWER WHO  VIOLATES  ANY  PROVISION  OF
 THIS  SECTION  IS  GUILTY  OF  A MISDEMEANOR PUNISHABLE BY A FINE NOT TO
 EXCEED TWENTY-FIVE THOUSAND DOLLARS OR BY IMPRISONMENT NOT TO EXCEED SIX
 MONTHS, OR BY BOTH SUCH FINE AND IMPRISONMENT. FOR ANY SECOND OR  SUBSE
 QUENT  VIOLATION,  THE PERSON IS GUILTY OF A FELONY PUNISHABLE BY IMPRI
 SONMENT NOT EXCEEDING TWO YEARS, OR BY A FINE NOT EXCEEDING ONE  HUNDRED
 THOUSAND DOLLARS, COMMUNITY SERVICE OF NOT MORE THAN ONE THOUSAND HOURS,
 OR  ANY  COMBINATION  THEREOF. PROSECUTION UNDER THIS SUBDIVISION MAY BE
 CONDUCTED BY THE ATTORNEY GENERAL OR THE DISTRICT ATTORNEY.
 (C) WHERE A VIOLATION OF THIS SECTION IS ALLEGED TO HAVE OCCURRED, THE
 ATTORNEY GENERAL OF THE STATE OF NEW YORK MAY APPLY IN THE NAME  OF  THE
 PEOPLE OF THE STATE OF NEW YORK TO THE SUPREME COURT OF THE STATE OF NEW
 YORK  WITHIN THE JUDICIAL DISTRICT IN WHICH SUCH VIOLATION IS ALLEGED TO
 HAVE OCCURRED, ON NOTICE OF  FIVE  DAYS,  FOR  AN  ORDER  OR  INJUNCTION
 ENJOINING A PERSON FROM ENGAGING IN THE COMMISSION OR CONTINUANCE OF ANY
 CONDUCT  IN  VIOLATION OF THIS SECTION AND/OR IMPOSING ANY SUCH OTHER OR
 FURTHER RELIEF AS THE COURT MAY CONSIDER JUST AND EQUITABLE. IN ANY SUCH
 PROCEEDING, THE COURT SHALL IMPOSE A CIVIL PENALTY IN AN AMOUNT  NOT  TO
 EXCEED  TEN  THOUSAND  DOLLARS  OR  TWICE THE AMOUNT OF POINTS, FEES AND
 COSTS PAID UPON CLOSING OF THE REAL ESTATE TRANSACTION AT ISSUE,  WHICH
 EVER  IS  GREATER,  AND,  WHERE  APPROPRIATE,  RESTITUTION  TO AGGRIEVED
 CONSUMERS OR OTHER VICTIMS OF A VIOLATION OF THIS SECTION.
 9. NON-EXCLUSIVITY OF RIGHTS OR  REMEDIES.  NOTHING  IN  THIS  SECTION
 SHALL  BE  CONSTRUED  TO  LIMIT,  IN  ANY MANNER, ANY RIGHTS OR REMEDIES
 OTHERWISE AVAILABLE UNDER LAW TO ANY PERSON OR  ENTITY,  INCLUDING,  BUT
 NOT LIMITED TO, THE ATTORNEY GENERAL OF THE STATE OF NEW YORK.
 

S 3. This act shall take effect immediately.

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