Legal Blog
NJ Adopts Registration Requirements for Appraisal Management Companies
The Board of Real Estate Appraisers (the “Board”) has adopted N.J.A.C. 13:40A-9.1 et seq., a regulation which requires appraisal management companies to register with the Board. The regulation was effective on July 1.
The term “appraisal management company” is defined by the authorizing legislation as a person that:
- 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.
An Appraisal Management Company, or AMC, is defined to not include a department or a division of an entity that provides appraisal management services for that entity.
The regulation requires that each person that engages in the business of an appraisal management company, or advertises or holds itself out as conducting business as an appraisal management company, register with the Board. N.J.A.C. 13:40A-9.4(a). The registration requirement does not apply to AMCs that are owned and controlled by banks or thrifts.
Registration is now available online at https://www.njconsumeraffairs.gov/rea. AMC’s registering with the Board must provide company information, ownership information, a $25,000 surety bond, and criminal background checks among other requirements. The rules also include requirements for the conduct of the AMC. For example, the AMC must, in the regular course of business, make payment to an appraiser within 60 days after the appraiser transmits the completed appraisal to the AMC. Exceptions are made for cases involving a breach of contract or substandard performance issues. N.J.A.C. 13:40A-9.10.
From the perspective of the creditor, vendor management will now require that lenders using AMCs will need to document that the AMC utilized in a residential mortgage loan transaction was properly registered with the Board. Since the online registration just became available, there will be some delay in the AMCs registering as required by the rule.
If you have any questions about this topic, please contact Wayne at
ABOUT WAYNE WATKINSON
Wayne Watkinson is an attorney whose practice, since 1996, has concentrated on representing mortgage lenders and brokers and depositories in compliance, transactional, corporate and litigation matters. In addition, he assists clients in establishing mortgage companies, in obtaining mortgage banking licenses throughout the country, in preparing for and responding to state licensing examinations, and in defending administrative enforcement actions.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing full-service law firms in the United States. With over 200 attorneys in 14 offices that stretch from New York to North Carolina, we represent privately-held companies and families of wealth throughout their business life cycles. Our mission is to provide our clients with “The Better Way” to grow their organizations, protect their businesses’ and families’ wealth, and resolve their most challenging legal conflicts. In addition to our quality of attorneys and breadth of legal services, Offit Kurman is distinguished by our unique operational structure, which encourages collaboration rather than internal competition. The same approach that makes our firm attractive to legal practitioners gives clients unlimited access to experienced counsel in every area of the law. Trust, Knowledge, Confidence—in a partner, that’s perfect.
Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our Blog, Facebook, Twitter, Instagram, YouTube, and LinkedIn pages. You can also sign up to receive LawMatters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
MARYLAND | PENNSYLVANIA | VIRGINIA | NEW JERSEY | NEW YORK | DELAWARE | WASHINGTON, DC
