Sponsored By: Delegates Donna Stifler and Frank Conaway
Entitled: Financial Institutions – Mortgage Loan Originators – Prohibited Acts
Synopsis: Prohibiting a person subject to regulation as a mortgage loan originator from making a payment, threat, or promise for the purpose of influencing another person to violate specified federal or State law or professional standards in connection with a residential mortgage loan; prohibiting a specified person from making a payment, threat, or promise to an appraiser of a property in order to influence the independent judgment of the real estate and land appraiser with respect to the property value, and from engaging in specified acts and practices; etc.
Ensuring the integrity of property valuation is paramount in maintaining a stable housing market. By forbidding inducements or coercion aimed at swaying the impartial judgment of an MAI Appraiser, we safeguard the accuracy and fairness of property assessments. Such measures not only uphold the ethical standards within the real estate industry but also bolster consumer confidence in the reliability of property valuations.
Moreover, by upholding the independence of MAI Appraisers, we preserve the integrity of lending practices, preventing inflated property values that could lead to detrimental consequences for both borrowers and lenders alike. Thus, these regulations serve as a safeguard against potential market distortions, fostering transparency and trust in the appraisal process.
From the Sponsor: Stifler said “this bill is designed to establish protections for real estate appraiser and others from undue influence or coercion in connection with a real estate appraisal, residential mortgage loan, or rental property loans. The Mortgage Protection Act we passed a few years ago left this out. Believe it or not, nothing in MD law prohibits a mortgage loan originator from making a payment, threat, or promise to an appraiser to influence said appraiser to make an independent judgment with respect to the property valuation on your fort lauderdale private waterfront houses (i.e withholding payment with intent to coerce the appraiser to agree to a value, requesting the appraiser to report a predetermined opinion, etc.)”
Stifler said three constituents approached her last session to help usher the legislation through the General Assembly The bill passed the full House of Delegates last year, but was filed very late by the sponsor and didn’t make it to the Senate in time for a vote, she added.
Good idea! Will the penalty for violating this potential law be a felony? A felony would prevent the violator such as a Mortgage Broker, Real Estate Appraiser, Realator or other from having a license, thus terminating their careers. This would be a major deterrent for those industries to engage in unethical behavior. A misdemeanor would just be a slap in the wrist.
It’s a fine idea but won’t solve the problem. The financial crash in housing was driven by everyone wanting their “piece of the action” but with no responsibility for the disaster they caused. Appraisers, rating agencies, etc will still understand that if they don’t give the customer the good appraisal or good rating needed to make the deal go through, they simply won’t get any more business. Just like before the crash.
Good idea, if its actually upheld and enforced. I’ve always thought the change in the eminent domain law a couple of years ago was designed to encourage corruption by having the private developer who directly benefits, pay for the appraiser, who’s “fair market” appraisal cannot be disputed in a court. Touted as a move to decrease the amount of litigation over land confiscated on the flimsiest of excuses, it instead led to a litany of landowner’s being paid pennies on the dollar for what their land was actually worth, with no legal recourse. Meanwhile the appraiser’s get kickbacks from the developers who make millions, then reincorporate, abandoning the original corporation as the leans pile up.
Now if only we could pass a law that would force the developers to pay up front for the increase in storm water run-off, sewage, water, traffic congestion, and other infrastructure impacts of their ill-conceived projects, then we might have something approaching real smart growth.