New Law Protects Alaska’s Real Estate Market
ANCHORAGE—A bill ensuring that companies in the business of helping Alaskans appraise real estate can continue to operate was signed into law.
SB 155, sponsored by Sen. Kevin Meyer (R-Anchorage), puts Alaska in compliance with federal law by requiring the regulation of Appraisal Management Companies (AMC) by the Board of Certified Real Estate Appraisers. These regulations include establishing minimum standards, mandatory reporting, retention of records and inspection, prohibited practices, and disciplinary proceedings. The law also institutes registry fees, which are required by federal law and passed on to the federal government.
An AMC is an independent entity through which mortgage lenders order residential real estate valuation services for properties they are considering extending loans to homebuyers. AMCs fulfill an administrative function in the appraisal process. They select an appraiser and deliver the appraisal report to the lender. Individual appraisers who work for AMCs provide the actual property valuation services.
“SB 155 aims to promote public trust and consumer protection and establish oversight and enforcement where there is none today,” said Sen. Meyer. “Without this legislation, AMCs will no longer be allowed to operate in Alaska, which will have an adverse economic impact on Alaskans by stalling or ceasing certain lending institutions from issuing residential mortgages to Alaskans.”
AMCs existed before the 2008 global financial crisis, and today they play an increasingly important role as a third-party service provider in the consumer mortgage process. AMCs have become popular with lenders across the country to ensure federal and state regulatory compliance and independence between lenders and appraisers.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires that states enact comprehensive AMC oversight and registration programs by August 10, 2018.
Alaska is one of only four states, plus the District of Columbia, that does not have comprehensive laws regulating AMCs. The other states are in the process of passing laws during this legislative cycle. Without the law, Alaskans will not be able to receive Fannie Mae and Freddie Mac backed mortgages.