Gov. Jay Inslee on Friday signed a bill into law that will increase transparency in Washington’s appraisal management companies and ensure the state’s appraisal management program remains in compliance with federal regulations.
Senate Bill 5124 was first-year Sen. Mona Das’ first bill to be passed by the Senate on Jan. 30. The House of Representatives passed the bill April 11.
The measure draws upon Das’ experience in the mortgage industry, where appraisal management companies provide a buffer between lenders and appraisers, with the goal of preventing lenders from basing mortgages on inflated appraisal values.
“This bill is truly about protecting homebuyers,” said Das, D-Kent. “Inflated appraisal values are one of the causes of the housing bubble and the recession that sent our economy into freefall a decade ago. We must act now to prevent that from happening again.”
This bill specifically changes the license period for appraisal management companies from two years to one year, allowing the collection of a new federal fee in the year 2020. There are no increases to state fees as part of this process.
The bill also raises the standards for people who can have an ownership interest in appraisal management companies. No one who has had an appraiser license denied, cancelled or revoked in any jurisdiction may have an ownership interest in one of these companies.
“For the health of our economy, we must ensure that this industry receives proper oversight,” Das said. “The steps we take today will determine what our economy will look like in the years to come.”