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S09080 Summary:

BILL NOS09080
 
SAME ASSAME AS A10831-A
 
SPONSORHAMILTON
 
COSPNSRSEPULVEDA
 
MLTSPNSR
 
Add Art 6-H 160-aaaa - 160-xxxx, Exec L
 
Relates to the registration of real estate appraisal management companies or an individual or business entity that provides appraisal management services to creditors or to secondary mortgage market participants including affiliates by the department of state.
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S09080 Actions:

BILL NOS09080
 
06/15/2018REFERRED TO RULES
06/19/2018ORDERED TO THIRD READING CAL.2021
06/19/2018PASSED SENATE
06/19/2018DELIVERED TO ASSEMBLY
06/19/2018referred to ways and means
06/20/2018substituted for a10831a
06/20/2018ordered to third reading rules cal.459
06/20/2018passed assembly
06/20/2018returned to senate
12/18/2018DELIVERED TO GOVERNOR
12/28/2018SIGNED CHAP.517
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S09080 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9080
 
                    IN SENATE
 
                                      June 15, 2018
                                       ___________
 
        Introduced  by Sen. HAMILTON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules
 
        AN ACT to amend the executive law, in relation to registration  of  real
          estate appraisal management companies by the department of state
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The executive law is amended by adding a new article 6-H to
     2  read as follows:
     3                                 ARTICLE 6-H
     4                 REAL ESTATE APPRAISAL MANAGEMENT COMPANIES
     5  Section 160-aaaa. Definitions.
     6          160-bbbb. Registration required.
     7          160-cccc. Exemptions.
     8          160-dddd. Forms.
     9          160-eeee. Denial of registration.
    10          160-ffff. Expiration of license.
    11          160-gggg. Fees.
    12          160-hhhh. Owner requirements.
    13          160-iiii. Controlling persons.
    14          160-jjjj. Employee requirements.
    15          160-kkkk. Restrictions.
    16          160-llll. Recordkeeping.
    17          160-mmmm. Appraiser independence; unlawful acts.
    18          160-nnnn. Mandatory reporting.
    19          160-oooo. Unprofessional conduct.
    20          160-pppp. Alteration of appraisal reports.
    21          160-qqqq. Enforcement.
    22          160-rrrr. Disciplinary hearings.
    23          160-ssss. Power to suspend a license.
    24          160-tttt. Investigation.
    25          160-uuuu. Rule-making authority.
    26          160-vvvv. Violations.
    27          160-wwww. Severability.
    28          160-xxxx. Judicial review.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14549-09-8

        S. 9080                             2
 
     1    § 160-aaaa. Definitions. As used in this article, the following  terms
     2  shall have the following meanings:
     3    1.  "Appraisal"  or "real estate appraisal" means an analysis, opinion
     4  or conclusion relating to the nature, quality, value or utility of spec-
     5  ified interests in, or aspects of, identified real estate. An  appraisal
     6  may be classified by subject matter into either a valuation or an analy-
     7  sis.
     8    2.  "Appraisal  management  company"  or  "AMC" means an individual or
     9  business entity that:
    10    (a) provides appraisal management services to creditors or to  second-
    11  ary mortgage market participants, including affiliates;
    12    (b)  provides  such  services  in connection with valuing a consumer's
    13  real property as security for consumer credit transactions secured by  a
    14  consumer's principal dwelling; and
    15    (c)  within  a  given  year,  oversees an appraisal panel of more than
    16  fifteen appraisers working in New York  state  or  twenty-five  or  more
    17  appraisers  working  in  two or more states.  An AMC shall not include a
    18  department or division of an entity that provides  appraisal  management
    19  services only to that entity.
    20    3.  "Appraisal  management services" means to, directly or indirectly,
    21  provide any of the following services on behalf of a  lender,  financial
    22  institution,  client,  or  any other person in connection with valuing a
    23  consumer's principal dwelling as security for a consumer  credit  trans-
    24  action or incorporating such transactions into securitizations:
    25    (a) administer an appraiser panel;
    26    (b) recruit, retain or select appraisers;
    27    (c)  qualify  or  verify licensing or certification and negotiate fees
    28  and service level expectations with persons who are part of an appraiser
    29  panel;
    30    (d) contract with appraisers to perform appraisal assignments;
    31    (e) receive an order for an appraisal from one person, and deliver the
    32  order for the appraisal to an appraiser that is  part  of  an  appraiser
    33  panel for completion;
    34    (f)  manage  the  process  of having an appraisal performed, including
    35  providing administrative duties, such as receiving appraisal orders  and
    36  reports,  submitting completed appraisal reports to creditors and under-
    37  writers for services provided, and reimbursing appraisers  for  services
    38  performed;
    39    (g) track and determine the status of orders for appraisals;
    40    (h)  conduct  quality  control  of  a completed appraisal prior to the
    41  delivery of the appraisal to the person that ordered the appraisal;
    42    (i) provide a completed appraisal performed by an appraiser to one  or
    43  more clients; or
    44    (j) compensate appraisers for services rendered.
    45    An  individual  who  hires  an  appraiser  solely  for  his or her own
    46  purposes, shall not be deemed an appraisal management company.
    47    4. "Appraiser" means a person licensed or certified pursuant to  arti-
    48  cle six-E of this chapter.
    49    5.  "Appraiser  panel"  means a network, list or roster of licensed or
    50  certified appraisers approved by the  appraisal  management  company  to
    51  perform  appraisals  as independent contractors of the appraisal manage-
    52  ment company.
    53    6. "Appraisal review" means the  act  or  process  of  developing  and
    54  communicating  an  opinion about the quality of another appraiser's work
    55  that was performed as part of an appraisal assignment. Appraisal reviews

        S. 9080                             3
 
     1  must be performed by  a  person  who  is  certified  as  a  real  estate
     2  appraiser pursuant to article six-E of this chapter.
     3    7.  "Board" means the state board of real estate appraisal which shall
     4  advise the department, as necessary, on implementation of, and  enforce-
     5  ment of this article.
     6    8.  "Competent  appraiser"  means  an  appraiser  that  satisfies each
     7  provision of the competency rule of the  uniform  standards  of  profes-
     8  sional  appraisal  practice for a specific appraisal assignment or valu-
     9  ation service that the appraiser has received, or may receive,  from  an
    10  appraisal management company.
    11    9. "Controlling person" means:
    12    (a)  an owner, officer or director of an appraisal management company,
    13  or an individual who holds an ownership interest of ten percent or  more
    14  of such company;
    15    (b)  an  individual  employed, appointed or authorized by an appraisal
    16  management company that has the authority to enter  into  a  contractual
    17  relationship with other persons for the performance of appraisal manage-
    18  ment  services  and  has  the  authority  to  enter into agreements with
    19  appraisers for the performance of appraisals; or
    20    (c) an individual who possesses, directly or indirectly, the power  to
    21  direct  or  cause  the  direction  of  the  management or policies of an
    22  appraisal management company.
    23    10. "Department" means the New York state department of state.
    24    11. "Hybrid firm or entity" means  an  entity  that  hires  both  real
    25  estate  appraisers  as employees to perform appraisals of real property,
    26  and engage independent contractors to perform such appraisals. A  hybrid
    27  firm  or  entity shall be treated as an AMC for purposes of state regis-
    28  tration if it oversees more than fifteen real estate appraisers complet-
    29  ing valuation services in an individual state  or  twenty-five  or  more
    30  real  estate  appraisers  in two or more states within a given year. The
    31  numerical calculation for a hybrid firm or entity  should  only  include
    32  real estate appraisers engaged as independent contractors.
    33    12.  "Person"  means  an  individual, partnership, corporation, or any
    34  other entity recognized under New York state law.
    35    13. "Real estate" means an identified parcel or tract of land, includ-
    36  ing improvements, if any.
    37    14. "Real property" means the interest, benefits, and rights  inherent
    38  in the ownership of real estate.
    39    15.  "Uniform standards of professional appraisal practice" or "USPAP"
    40  means the appraisal standards promulgated  by  the  appraisal  standards
    41  board of the appraisal foundation.
    42    16.  "Secondary  mortgage  market  participant"  means  a guarantor or
    43  insurer of mortgage-backed securities, or an underwriter  or  issuer  of
    44  mortgage-backed  securities.  Secondary mortgage market participant only
    45  includes an individual investor in a mortgage-backed  security  if  that
    46  investor also serves in the capacity of a guarantor, insurer, underwrit-
    47  er, or issuer for such mortgage-backed security.
    48    §  160-bbbb.  Registration required. It shall be unlawful for a person
    49  to, directly or indirectly, engage or attempt to engage in  business  as
    50  an  appraisal management company, or to advertise or hold oneself out as
    51  engaging in or conducting business as an  appraisal  management  company
    52  without  first  obtaining  a  certificate  of registration issued by the
    53  department under the provisions of this article.
    54    § 160-cccc. Exemptions. The provisions of this article shall not apply
    55  to any person that exclusively employs appraisers for the performance of
    56  appraisals or to any appraisal management company that is a wholly-owned

        S. 9080                             4
 
     1  subsidiary of a financial institution, which is regulated by the federal
     2  financial institution regulatory agency. The registration provisions  of
     3  this  article shall not apply to the state, any state agency or authori-
     4  ty, or any political subdivision of the state that employs appraisers.
     5    §  160-dddd.  Forms. An applicant for a certificate of registration as
     6  an appraisal management company shall  submit  an  application  on  such
     7  forms as prescribed by the department.
     8    § 160-eeee. Denial of registration. The department may investigate the
     9  good  character  of  applicants  for a certificate of registration under
    10  this article and may deny the issuance of such certificate of  registra-
    11  tion  based  upon lack of good moral character which may include, but is
    12  not limited to, any of the grounds enumerated in this article.  For  the
    13  purposes  of  this article, a non-substantive ground for denial, revoca-
    14  tion, or surrender of an appraiser's license should not be construed  as
    15  an automatic prohibition.
    16    §  160-ffff.  Expiration  of  license.  A  certificate of registration
    17  granted by the department pursuant to this article shall be valid for  a
    18  period of two years from the date upon which it is issued.
    19    § 160-gggg. Fees. 1. The department shall collect a fee of two hundred
    20  fifty dollars for a certificate of registration issued or reissued under
    21  the  provisions  of  this  article.  Additionally,  the department shall
    22  assess twenty-five dollars for each  appraiser  added  to  an  appraisal
    23  management company's appraiser panel.
    24    2. The department shall collect from each appraisal management company
    25  seeking to be registered, the amount determined by the appraisal subcom-
    26  mittee  to  be a national registry fee for each appraiser, that performs
    27  appraisal services  within  New  York  on  the  appraiser  panel  of  an
    28  appraisal  management  company  pursuant  to  Section  1109(a)(4) of the
    29  federal Financial Institutions Reform, Recovery, and Enforcement Act  of
    30  1989  as  amended  by  the  Dodd-Frank  Wall  Street Reform and Consumer
    31  Protection Act of 2010. The department may transmit the annual  registry
    32  fee  to  the  appraisal  subcommittee.  The department shall provide its
    33  roster of appraisal management companies to the appraisal  subcommittee.
    34  These transmittals shall occur at least annually.
    35    3. Except for changes made on a renewal application, appraisal manage-
    36  ment  companies  shall provide the department with notice of a change in
    37  the appraisal management's principal address. Change of address  notifi-
    38  cations shall be accompanied by a fee of ten dollars.
    39    4.  Except  for  changes made on a renewal application, the department
    40  shall collect a fee of ten dollars for changing a name on a  certificate
    41  of registration.
    42    5.  In  lieu  of the fee set forth in subdivision one of this section,
    43  the department shall collect a fee of three  hundred  fifty  dollars  to
    44  reissue  a  certificate  of  registration  under  this article which was
    45  submitted after the expiration of the immediately preceding registration
    46  term.
    47    § 160-hhhh. Owner requirements. An appraisal management company apply-
    48  ing for a certificate of registration shall not be owned in whole or  in
    49  part,  directly or indirectly, by a person who has had a license, regis-
    50  tration or certificate  to  act  as  a  real  estate  appraiser  denied,
    51  revoked, or surrendered in lieu of pending discipline in any state or by
    52  a  person  holding  ten percent or more of the company where that person
    53  has had a license, registration or certificate to act as a  real  estate
    54  appraiser denied, revoked, or surrendered in lieu of possible discipline
    55  in any state.

        S. 9080                             5
 
     1    §  160-iiii. Controlling persons. 1. Each appraisal management company
     2  applying for a certificate of registration shall designate one  control-
     3  ling  person who shall be the main contact for all communication between
     4  the department and the appraisal  management  company.  Such  designated
     5  controlling  person shall never have had a license or certificate to act
     6  as an appraiser denied, revoked, or  surrendered  in  lieu  of  possible
     7  discipline  in any state and shall be of good moral character, as deter-
     8  mined by the department. Applicants shall cooperate with any such  back-
     9  ground investigation conducted by the department.
    10    2. Each person that owns more than ten percent of an appraisal manage-
    11  ment  company  shall  be  of  good moral character, as determined by the
    12  department.  Applicants shall cooperate with any such background  inves-
    13  tigation conducted by the department.
    14    3.  Each  appraisal  management  company applying for a certificate of
    15  registration shall certify to the department that it has  reviewed  each
    16  entity  that  owns  more  than  ten  percent of the appraisal management
    17  company and that no entity that  owns  more  than  ten  percent  of  the
    18  appraisal  management  company  is  more  than  ten percent owned by any
    19  person that has had a license or certificate  to  act  as  an  appraiser
    20  denied, revoked, or surrendered in lieu of a pending revocation.
    21    §  160-jjjj. Employee requirements. 1. An appraisal management company
    22  that applies for a  certificate  of  registration  shall  not  knowingly
    23  employ,  utilize,  or  engage,  for any real estate appraisal, valuation
    24  service or appraisal review assignment, a person who has had  a  license
    25  or  certificate  to  act  as  an appraiser in this state or in any other
    26  state denied, revoked, or surrendered in lieu  of  possible  discipline,
    27  unless such license has been reinstated.
    28    2.  Prior  to  placing  an  assignment  for  an appraisal or valuation
    29  service with an appraiser on the appraiser panel of an appraisal manage-
    30  ment company, the appraisal management company  shall  verify  that  the
    31  appraiser  receiving  the assignment is a competent appraiser as defined
    32  by the USPAP Competency Rule with regards to  geographic  area  and  the
    33  type  of  property  being  appraised.  An appraiser is deemed part of an
    34  appraisal management company panel as of the earliest date on which: (a)
    35  the appraisal management company accepts the appraiser for consideration
    36  for future appraisal assignments in covered transactions or for  second-
    37  ary  mortgage  market  participants  in  connection  with covered trans-
    38  actions; or (b) engages the appraiser to perform one or more  appraisals
    39  on  behalf of a creditor for a covered transaction or secondary mortgage
    40  market participant in connection with covered transactions.
    41    3. An appraisal management company may not hire, employ or engage,  or
    42  in  any  way contract with or pay a person who is not licensed or certi-
    43  fied as a real estate appraiser by the department  pursuant  to  article
    44  six-E  of this chapter, unless the work being performed is a comparative
    45  market analysis for the purpose of or intention to  list  or  sell  real
    46  estate.
    47    4.  An  appraiser  shall be considered part of an appraisal management
    48  company's appraiser panel until: (a) the  appraisal  management  company
    49  sends a written notice to such appraiser removing such appraiser with an
    50  explanation; or (b) receives a written notice from such appraiser asking
    51  to be removed or of the death or incapacity of such appraiser.
    52    § 160-kkkk. Restrictions. An appraisal management company that applies
    53  for a certificate of registration shall not knowingly:
    54    1. Employ any person in a position in which the person has the respon-
    55  sibility  to  order  appraisals  or  valuation  services  or  to  review
    56  completed appraisals who has had a license, registration or  certificate

        S. 9080                             6

     1  to  act  as  an  appraiser  in this state or in any other state, denied,
     2  revoked, or surrendered in lieu of a  pending  revocation,  unless  such
     3  license has been reinstated;
     4    2.  Enter  into  any  independent  contractor  arrangement, whether in
     5  verbal, written, or by other  form,  with  any  person  who  has  had  a
     6  license,  registration  or  certificate  to  act as an appraiser in this
     7  state or in any other state, denied, revoked, or surrendered in lieu  of
     8  a pending revocation, unless such license has been reinstated; and
     9    3. Enter into any contract, agreement, or other business relationship,
    10  whether in verbal, written, or other form, with any entity that employs,
    11  has  entered  into  an  independent contract arrangement, or has entered
    12  into any contract, agreement, or other business relationship, whether in
    13  verbal, written, or any other form, with any person who has ever  had  a
    14  license,  registration  or  certificate  to  act as an appraiser in this
    15  state or in any other state, denied, revoked, or surrendered in lieu  of
    16  a pending revocation, unless such license has been reinstated.
    17    §  160-llll.  Recordkeeping.  Each  appraisal management company shall
    18  maintain a detailed record of each service request that it receives  and
    19  the real estate appraiser that performs such appraisal for the appraisal
    20  management company. Records shall be maintained for a period of at least
    21  five  years  after  such appraisal is completed or two years after final
    22  disposition of a judicial proceeding related to such assignment,  which-
    23  ever  period  expires later.   Appraisal management companies shall make
    24  records available to the department upon request.  Appraisal  management
    25  companies  shall  also  allow  the  department  to examine the books and
    26  records of the appraisal management company and  require  it  to  submit
    27  reports,  information  and documents upon request.  Appraisal management
    28  companies shall also allow the department to verify that the  appraisers
    29  on such panel hold a valid license or certification.
    30    §  160-mmmm.  Appraiser  independence;  unlawful  acts. Each appraisal
    31  management  company  shall  ensure  that  real  estate  appraisals   are
    32  conducted  independently and free from inappropriate influence and coer-
    33  cion. Notwithstanding any other provision of this article, it  shall  be
    34  unlawful  for  any employee, director, officer, or agent of an appraisal
    35  management company registered in this state pursuant to this article to:
    36    1. Compensate, coerce, extort, collude, instruct,  induce,  bribe,  or
    37  intimidate, or attempt to compensate, coerce, extort, collude, instruct,
    38  induce,  bribe,  or intimidate a person, firm or other entity conducting
    39  or involved in an appraisal for the purpose  of  causing  the  appraised
    40  value  assigned  under  the appraisal or other valuation services to the
    41  property to be based on any factor other than the  independent  judgment
    42  of the appraiser;
    43    2.  Mischaracterize  the  appraised value of a property in conjunction
    44  with a consumer credit transaction;
    45    3. Seek to influence an appraiser or otherwise to encourage a targeted
    46  value in order to facilitate the making or pricing of a consumer  credit
    47  transaction;
    48    4.  Act  without just cause to withhold or threaten to withhold timely
    49  payment for an appraisal report or for other valuation services rendered
    50  with such appraisal report or services provided in accordance  with  the
    51  contract between parties;
    52    5.  Act  without just cause to withhold or threaten to withhold future
    53  business, or to demote or terminate an appraiser without just cause;
    54    6. Expressly or implicitly promise  future  business,  promotions,  or
    55  increased  compensation for an appraiser in exchange for the real estate

        S. 9080                             7
 
     1  appraiser inflating or deflating his or  her  appraised  value  of  real
     2  property;
     3    7.  Require  a real estate appraiser to indemnify an appraisal manage-
     4  ment company or hold an appraisal management company  harmless  for  any
     5  liability,  damage,  losses,  or  claims  arising  out  of  the services
     6  performed by such appraisal management company,  and  not  the  services
     7  performed by the appraiser;
     8    8.  Condition the request for an appraisal or the payment of an earned
     9  fee, salary or bonus, on the opinion, conclusion,  or  valuation  to  be
    10  reached,  or  on  a  preliminary  estimate  or opinion requested from an
    11  appraiser;
    12    9. Request that an appraiser provide an estimated,  predetermined,  or
    13  desired valuation in an appraisal report, or provide estimated values or
    14  comparable  sales  at any time prior to the appraiser's completion of an
    15  appraisal;
    16    10. Provide to an appraiser an anticipated, estimated, encouraged,  or
    17  desired  value  for a subject property or a proposed or target amount to
    18  be loaned to the borrower, except that a copy of the sales contract  for
    19  purchase transactions may be provided; or
    20    11.  Provide  to  an appraiser, or any entity or person related to the
    21  appraiser, stock or any other financial  or  non-financial  benefits  in
    22  exchange  for  appraising  property in a manner other than that which is
    23  within the independent opinion of the appraiser.
    24    Nothing  in  this  section  shall  be  construed  as  prohibiting  the
    25  appraisal  management company from asking an appraiser to consider addi-
    26  tional, appropriate property information, including:  additional  compa-
    27  rable  properties  to  make  or  support  an  appraisal; provide further
    28  detail, substantiation, or explanation for the appraiser's value conclu-
    29  sion; or correct errors in the appraisal report.
    30    § 160-nnnn. Mandatory reporting. An appraisal management company  that
    31  has  a  reasonable  basis  to  believe an appraiser within the appraisal
    32  management company's appraisal panel  is  failing  to  comply  with  the
    33  uniform  standards  of  professional  appraisal  practice,  is violating
    34  applicable laws, or is otherwise engaging in unethical or unprofessional
    35  conduct shall immediately refer such matter to the department.
    36    § 160-oooo. Unprofessional conduct. 1. Appraisal management  companies
    37  shall not engage in unprofessional conduct including, but not limited to
    38  the following:
    39    (a) Requiring an appraiser to modify any aspect of an appraisal report
    40  or  valuation  service report, unless such modifications are appropriate
    41  according to USPAP;
    42    (b) Requiring an appraiser to prepare an appraisal report or valuation
    43  service report  if  such  appraiser,  in  their  professional  judgment,
    44  believes  they  don't  have  the  necessary  expertise  for the specific
    45  geographic and or specific area type;
    46    (c) Requiring an appraiser to prepare an appraisal report or valuation
    47  service under a time  frame  that  such  appraiser  believes,  in  their
    48  professional  judgment,  does  not  afford such appraiser the ability to
    49  meet all the relevant legal and professional obligations including USPAP
    50  requirements. Notwithstanding the foregoing  provisions  of  this  para-
    51  graph,  all  appraisal  reports  should be completed within a reasonable
    52  timeframe  and  appraisers  may  not  unnecessarily   delay   completing
    53  appraisal assignments;
    54    (d)  Prohibiting or inhibiting communication between the appraiser and
    55  the lender, a real estate licensee, or any other person from  whom  such
    56  appraiser, in their professional judgment is relevant;

        S. 9080                             8
 
     1    (e)  Requiring  the appraiser to do anything that does not comply with
     2  USPAP, or any assignment conditions and certifications required  by  the
     3  client;
     4    (f) Making any portion of the appraiser's fee or the appraisal manage-
     5  ment  company's  fee contingent upon a favorable outcome, including, but
     6  not limited to, the closing of  a  loan,  requiring  a  specific  dollar
     7  amount  be  achieved  by  such appraiser in the appraisal report, making
     8  requests for the purpose of facilitating a  mortgage  loan  transaction,
     9  setting a broker price opinion, or setting any other real property price
    10  or value estimation that does not qualify as an appraisal; or
    11    (g)  Each  appraisal  management company operating in this state shall
    12  make payment to an appraiser for the completion of an appraisal or valu-
    13  ation assignment within thirty days of the date on which such  appraiser
    14  transmits  or  otherwise  provides  the completed appraisal or valuation
    15  services to the appraisal management company or its assignee;
    16    2. It shall be unlawful for an appraisal management company to:
    17    (a) Knowingly fail to compensate  an  appraiser  at  a  rate  that  is
    18  reasonable and customary for appraisal or other valuation services being
    19  performed in the market area of the property being appraised without the
    20  services  of  an appraisal management company in a manner that is either
    21  inconsistent with, or would violate section 1639(e) of the federal Truth
    22  in Lending Act (15 USC §1639(e));
    23    (b) Knowingly include any fees for appraisal management services  that
    24  are  performed by the appraisal management company for a lender, client,
    25  or other person in the amount that it charges  the  lender,  client,  or
    26  other  person  for  the  actual  completion of an appraisal or valuation
    27  service by an appraiser that is part  of  the  appraiser  panel  of  the
    28  appraisal management company;
    29    (c) Knowingly fail to separate any and all fees charged to a client by
    30  the  appraisal  management  company  for  the  actual  completion  of an
    31  appraisal by an appraiser from the fees charged to a lender, client,  or
    32  any  other  person  by  an  appraisal  management  company for appraisal
    33  management services;
    34    (d) Knowingly prohibit an appraiser from recording the fee  that  such
    35  appraiser  was paid by the appraisal management company for the perform-
    36  ance of the appraisal within the appraisal report that is  submitted  by
    37  such appraiser to the appraisal management company;
    38    (e)  Knowingly  fail to separately state the fees paid to an appraiser
    39  for appraisal services and the fees charged by the appraisal  management
    40  company  for  services  associated  with the management of the appraisal
    41  process to the client, borrower and any other payer.  Appraisal  manage-
    42  ment  companies  shall  provide a copy of the appraiser's invoice with a
    43  copy of any appraisal report submitted to a client or a client's  repre-
    44  sentative;
    45    (f)  Knowingly allow the removal from rotation of an appraiser from an
    46  appraiser panel, without prior written notice  to  such  appraiser  with
    47  just cause; or
    48    (g) Knowingly obtain, use, or pay for a second or subsequent appraisal
    49  or  the  ordering of an automated valuation model or any other valuation
    50  service in connection with a mortgage financing transaction unless there
    51  is a reasonable basis to believe that the initial appraisal  was  flawed
    52  or tainted and such basis is clearly and appropriately noted in the loan
    53  file,  or  unless  such  appraisal  or automated valuation model is done
    54  pursuant to a bona fide pre- or post-funding appraisal review or quality
    55  control process. Nothing in this paragraph shall prohibit  an  AMC  from
    56  obtaining  additional appraisals if required by a lending program, or if

        S. 9080                             9
 
     1  such additional appraisals are required by applicable local,  state,  or
     2  federal law.
     3    §  160-pppp.  Alteration of appraisal reports. An appraisal management
     4  company shall  not  alter,  modify,  or  otherwise  change  a  completed
     5  appraisal  or  valuation  service  report  submitted  by an appraiser by
     6  removing such appraiser's signature or seal or by adding information to,
     7  or removing information from such report with intent to change the valu-
     8  ation conclusion. An appraisal management company shall not  require  an
     9  appraiser  to  provide  such  appraisal  management  company  with  such
    10  appraiser's digital signature or seal.
    11    § 160-qqqq. Enforcement. The department  may  revoke  or  suspend  the
    12  license  of  an  appraisal  management  company,  or in lieu thereof may
    13  impose a fine, per violation, not to exceed twenty-five thousand dollars
    14  if the department finds that the licensee has made a material  misstate-
    15  ment  in  the application for such license, or if such licensee has been
    16  found guilty of fraud or  fraudulent  practices,  or  for  dishonest  or
    17  misleading  advertising, or has demonstrated untrustworthiness or incom-
    18  petency to act as an appraisal management company, or has  violated  any
    19  provision  of  this  article or a regulation promulgated thereunder. The
    20  department shall report any  such  violations  by  appraisal  management
    21  companies to the appraisal subcommittee.
    22    § 160-rrrr. Disciplinary hearings. The department shall, before revok-
    23  ing  or  suspending any license or imposing any fine or reprimand on the
    24  holder thereof, and at least twenty days prior to the date set  for  the
    25  hearing,  notify,  in writing, the holder of such license of any charges
    26  made and shall afford such licensee an opportunity to be heard in person
    27  or by counsel in reference thereto.  Such written notice may  be  served
    28  by  personal  delivery to the licensee, or by certified mail to the last
    29  known business address of such licensee or unlicensed person, or by  any
    30  method  authorized  by  the civil practice law and rules. The hearing on
    31  such charges shall be at such time and place  as  the  department  shall
    32  prescribe.
    33    §  160-ssss.  Power  to  suspend a license. In cases where the health,
    34  safety, or welfare of the public is  endangered,  the  department  shall
    35  have  the  authority  to immediately suspend a license pending a hearing
    36  before an administrative law judge.
    37    § 160-tttt. Investigation. The department  shall  have  the  power  to
    38  enforce the provisions of this article and upon complaint of any person,
    39  or  on  its  own  initiative, to investigate any violation thereof or to
    40  investigate the business, business practices and business methods of  an
    41  appraisal  management  company, if in the opinion of the department such
    42  investigation is warranted. Each such applicant  or  licensee  shall  be
    43  obliged, on request of the department, to supply such information as may
    44  be  required concerning his or its business, business practices or busi-
    45  ness methods, or proposed business practices or methods.
    46    For the purpose of enforcing the provisions of this  article,  and  in
    47  making  investigations  relating  to  any violation thereof, and for the
    48  purpose of investigating the character, competency and integrity of  the
    49  applicants  or licensees hereunder, and for the purpose of investigating
    50  the business, business practices and business methods of  any  applicant
    51  or  licensee,  or  of  the  officers  or agents thereof, the department,
    52  acting by such officer or person in the department as the  secretary  of
    53  state  may  designate, shall have the power to subpoena and bring before
    54  the officer or person so designated any person in this state and require
    55  the production of any books, records or papers which he  deems  relevant
    56  to  the  inquiry  and  administer  an  oath to and take testimony of any

        S. 9080                            10
 
     1  person or cause his or her deposition  to  be  taken,  except  that  any
     2  applicant  or licensee or officer or agent thereof shall not be entitled
     3  to fees and/or mileage. A subpoena issued under this  section  shall  be
     4  regulated by the civil practice law and rules.
     5    §  160-uuuu. Rule-making authority. The department may adopt rules not
     6  inconsistent with the provisions of this chapter which may be reasonably
     7  necessary to implement, administer, and enforce the provisions  of  this
     8  chapter.
     9    § 160-vvvv. Violations. 1. Any person or company who fails to obtain a
    10  certificate  of  registration required pursuant to this article shall be
    11  guilty of a misdemeanor.
    12    2. Criminal actions for failure to obtain a certificate  of  registra-
    13  tion may also be prosecuted by the attorney general, or his or her depu-
    14  ty,  in the name of the people of the state, and in any such prosecution
    15  the attorney general, or his or her deputy, may exercise all the  powers
    16  and perform all the duties the district attorney is otherwise authorized
    17  to exercise or to perform therein.
    18    §  160-wwww. Severability. Should the courts of this state declare any
    19  provision of this  article  unconstitutional,  or  unauthorized,  or  in
    20  conflict with any other section or provision of this article, such deci-
    21  sion  shall  affect  only  such  section  or provision so declared to be
    22  unconstitutional or unauthorized and shall not affect any other  section
    23  or part of this article.
    24    § 160-xxxx. Judicial review. The actions of the department in granting
    25  or  refusing  to  grant  or  to renew a license under this article or in
    26  revoking or suspending such a license or imposing any fine or  reprimand
    27  on the holder thereof or refusing to revoke or suspend such a license or
    28  impose  any fine or reprimand shall be subject to review by a proceeding
    29  brought under and pursuant to article seventy-eight of the  civil  prac-
    30  tice  law  and  rules at the instance of the applicant for such license,
    31  the holder of a license so revoked, suspended, fined, or reprimanded  or
    32  the person aggrieved.
    33    § 2. This act shall take effect on the one hundred twentieth day after
    34  it  shall  have  become a law; provided, however, that the department of
    35  state is authorized to propose, adopt, amend and/or repeal any  rule  or
    36  regulation necessary for the implementation of this act immediately.
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