(a)  It shall be unlawful for any employee, director, officer, or agent of an appraisal management company registered in this state to influence or attempt to influence the development, reporting, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner. Examples of unlawful influence include, but are not limited to:

(1)  Withholding or threatening to withhold timely payment for an appraisal except in cases of breach of contract or substandard performance of services;

(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 prior to 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)  Removing an appraiser from a list of qualified appraisers, or adding an appraiser to an exclusionary list of disapproved appraisers, in connection with the influencing or attempting to influence an appraisal. This prohibition does not preclude the management of appraiser lists for bona fide administrative or quality-control reasons based on written policy;

(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 such basis is clearly and appropriately noted in the loan file, or unless such appraisal or automated valuation model is done pursuant to a bona fide pre-funding or post-funding appraisal review or quality control process; or

(10)  Any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality.

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Terms Used In Rhode Island General Laws 5-20.9-13

  • Appraisal: A determination of property value.
  • Appraisal: means an analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate. See Rhode Island General Laws 5-20.9-2
  • Appraisal management company: means :

    (i)  In connection with valuing properties collateralizing mortgage loans or mortgages incorporated into a securitization, any external third party authorized either by a creditor of a consumer credit transaction secured by a consumer's principal dwelling, or by an underwriter of or other principal in the secondary mortgage markets, that oversees a network or panel of more than fifteen (15) certified or licensed appraisers in Rhode Island or twenty-five (25) or more nationally, excluding those appraisers who do not provide appraisal services for covered transactions, within a given year to:

    (A)  Recruit, select, and retain appraisers;

    (B)  Contract with licensed and certified appraisers to perform appraisal assignments;

    (C)  Manage the process of having an appraisal performed, including providing administrative duties such as receiving appraisal orders and appraisal reports, submitting completed appraisal reports to creditors and underwriters, collecting fees from creditors and underwriters for services provided, and reimbursing appraisers for services performed; or

    (D)  Review and verify the work of appraisers. See Rhode Island General Laws 5-20.9-2

  • 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 related to the appraiser's data collection, analysis, opinions, conclusions, opinion of value, or compliance with the Uniform Standards of Professional Appraisal Practice; provided however, that "appraisal review" shall not include:

    (i)  A general examination for grammatical, typographical, or similar errors; or

    (ii)  A general examination for completeness, including regulatory or client requirements as specified in an agreement that does not communicate an opinion of value. See Rhode Island General Laws 5-20.9-2

  • Contract: A legal written agreement that becomes binding when signed.
  • Director: means the director of the department of business regulation. See Rhode Island General Laws 5-20.9-2
  • Independent fee appraiser: means :

    (i)  A natural person who is a state-licensed or state-certified appraiser and receives a fee for performing an appraisal, but who is not an employee of the person engaging the appraiser; or

    (ii)  An organization that, in the ordinary course of business, employs state-licensed or state-certified appraisers to perform appraisals, receives a fee for performing the appraisals, and is not subject to § 1124 of the federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), Rhode Island General Laws 5-20.9-2

  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • valuation: is a n estimate of the value of real estate or real property. See Rhode Island General Laws 5-20.9-2

(b)  Nothing in subsection (a) of this section shall be construed as prohibiting the appraisal management company from requesting that an independent fee appraiser:

(1)  Consider additional property information;

(2)  Provide additional information about the basis for a valuation; or

(3)  Correct objective factual errors in an appraisal report.

History of Section.
P.L. 2017, ch. 14, § 1; P.L. 2017, ch. 26, § 1.