Arizona Laws 32-3674. Appraiser independence; prohibitions
A. Any employee, director, officer or agent of an appraisal management company registered pursuant to this article shall not influence or attempt to influence the development, reporting or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery or any other manner, including:
Terms Used In Arizona Laws 32-3674
- Appraisal: A determination of property value.
- Appraisal: means the act or process of developing an opinion of the value of real property in conformance with the uniform standards of professional appraisal practice published by the appraisal foundation, or any other definition used in state or federal laws. See Arizona Laws 32-3661
- Appraisal management company: means a corporation, partnership, sole proprietorship, subsidiary or other business entity that directly or indirectly performs appraisal management services, regardless of the use of the term "appraisal management company" "mortgage technology provider" "lender processing services" "lender services" "loan processor" "mortgage services" "real estate closing services provider" "settlement services provider" or "vendor management company" or any other term, and that does any of the following:
(a) Administers an appraiser panel of at least sixteen state-licensed or state-certified appraisers in one state who are independent contractors or at least twenty-five state-licensed or state-certified appraisers in at least two states who perform real property appraisal services in this state for clients. See Arizona Laws 32-3661
- Appraisal report: means any communication, written or oral, of an appraisal. See Arizona Laws 32-3601
- Appraisal review: means the act or process of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal assignment, but does not include an examination of an appraisal for grammatical, typographical or other similar errors that do not communicate an opinion related to the appraiser's data collection, analysis, opinions, conclusions, estimate of value or compliance with the uniform standards of professional appraisal practice. See Arizona Laws 32-3661
- Appraiser: means a person who is licensed or certified as an appraiser pursuant to this chapter and who performs valuation services competently and in a manner that is independent, impartial and objective. See Arizona Laws 32-3661
- Contract: A legal written agreement that becomes binding when signed.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Process: means a citation, writ or summons issued in the course of judicial proceedings. See Arizona Laws 1-215
- Property: includes both real and personal property. See Arizona Laws 1-215
- Value: means the monetary relationship between properties and those who buy, sell or use those properties. See Arizona Laws 32-3601
1. Withholding or threatening to withhold timely payment for an appraisal.
2. Withholding or threatening to withhold future business for an independent appraiser or demoting or terminating, or threatening to demote or terminate, an independent appraiser.
3. Expressly or impliedly promising future business, promotions or increased compensation for an independent appraiser.
4. Conditioning the request for an appraisal service 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 or opinion requested from an independent appraiser.
5. Requesting that an independent appraiser provide an estimated, predetermined or desired valuation in an appraisal report or provide estimated values or comparable sales at any time before the independent appraiser’s completion of an appraisal service.
6. Providing to an independent 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.
7. Providing to an independent appraiser, or any entity or person related to the appraiser, stock or other financial or nonfinancial benefits.
8. Allowing the removal of an independent appraiser from an appraiser panel, without prior written notice to the appraiser.
9. Obtaining, using or paying for a second or subsequent appraisal or ordering an 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 the basis is clearly and appropriately noted in the loan file or unless the appraisal or automated valuation model is done pursuant to a bona fide prefunding or postfunding appraisal review or quality control process.
10. Engaging in any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity or impartiality.
B. An appraisal fee offered or paid may not be based on the predetermined value or range of value of the subject property or the amount of the transaction price.
C. Subsections A and B do not prohibit an appraisal management company from requesting that an independent appraiser either:
1. Provide additional information about the basis for a valuation.
2. Correct objective factual errors in an appraisal report.