New jersey appraisal management companies felt the new impacts of the Board of Real Estate Appraisers new policy that went into effect July 1, 2019. The N.J.A.C. 13:40A-9.1 et seq. now requires appraisal management companies to register with the Board of Real Estate Appraisers.
Definition of an Appraisal Management Company
In the state of New Jersey, appraisal management companies are defined as one who:
provides appraisal management services to creditors or to secondary mortgage market participants, including affiliates;
provides such services in connection with valuing a consumer’s principal dwelling as security for a consumer credit transaction or incorporating such transactions into securitizations; and
within a 12-month calendar year, oversees an appraiser panel of more than 15 state-certified or state-licensed appraisers in New Jersey, or 25 or more state-certified, or state-licensed appraisers in two or more states. N.J.S.A. 45:14F-29.
The definition of appraisal management companies does not include a division or entity that provides any appraisal management services for the particular entity that is registering with the Board of Real Estate Appraisers.
Those who much register with the Board of Real Estate Appraisers includes anyone that engages with an appraisal management company. It also includes those who advertise or conduct business as an appraisal management company. Any AMC that is owned or controlled by banks/thrifts are not required to register, according to N.J.A.C. 13:40A-9.4(a).
Online Registration Process for Appraisal Management Companies
Any appraisal management company that meets the required set out by the Board of Real Estate Appraisers can register online. When completing the registration process, the appraisal management company must provide their company information, ownership, and proof of a $25,000 surety bond. They must also pass criminal background checks and pass other requirements.
Appraisal management companies must now also follow new requirements in regards to conduct. One example includes payments. For example, the appraisal management company must pay an appraiser within 60 days of the completed appraisal of the AMC. If there is a breach of contract or poor performance, exceptions to the payment conduct guidelines will be made, according to N.J.A.C. 13:40A-9.10.
This impacts the creditor involved with the transaction. Vendor management now requires any lenders that do business with an appraisal management company must document that the AMC involved in the residential mortgage loan transaction is in fact registered with the Board of Real Estate Appraisers.
Appraisal management companies should quickly and swiftly begin their online registration process if they have not yet registered with the Board of Real Estate Appraisers. Failure to comply with N.J.A.C. 13:40A-9.1 et seq. could lead to consequences. Without proper registration, the appraisal management company could face fines and/or additional requirements from the Board.