This week marked NCAR's 2010 Legislative Meetings, which culminated on Wednesday when REALTORS
® from around the statevisited their representatives at their offices. Greensboro had a strong showing, with a group of GRRA leaders visiting the offices of Sens. Phil Berger and Katie Dorsett, and Reps. Earl Jones, Maggie Jeffus, Pricey Harrison, John Blust and Alma Adams.
(See more photos at the GRRA Facebook Page)
Here are a few topics they discussed:
1) Appraisal Management Company Regulation. Appraisal Management Companies (AMCs) are not new, but the number of AMCs and the frequency of their use has increased since the adoption of the Home Valuation Code of Conduct in 2008. That code prohibits mortgage professionals from ordering appraisals and mandates that lenders have either a separate department to order appraisals or use third party companies to select appraisers (these companies are commonly referred to as Appraisal Management Companies). Many lenders have chosen to use AMCs rather than to restructure their operations. AMCs are not currently regulated by the Federal government or the state of North Carolina.
We support Senate Bill 829 (Regulation of Appraisal Management Companies) introduced by Sen. Clark Jenkins (D – Edgecombe) because it
- benefits consumers by regulating AMCs, which directly affect home valuations and loan qualifications.
- requires all AMCs doing business in North Carolina to register with the North Carolina Appraisal Board.
- requires AMCs to have a compliance manager who is a certified appraiser.
- prohibits AMCs from acting in an unethical manner. Regulation will help ensure that homeowners will have accurate valuation of their residences and lenders will have accurate valuation of their collateral. There is the potential for fewer foreclosures, which will protect banks and consumers.
- requires AMCs to have systems in place to verify that the appraisers that they use are licensed appropriately and are complying with appraisal laws.
2) Ban on Private Transfer Fees. Private Transfer Fees (PTFs) are fees paid to a third party upon the transfer of real property. The fee is usually paid by the seller and can either be a fixed amount or a percentage of the sales price.
We support Senate Bill 35 (Reconveyance Fees Prohibited) introduced by Sen. David Hoyle (D – Gaston) because of the following:
- PTFs require consumers to pay thousands of dollars to parties that hold no ownership interest in the property for the right to buy or sell real estate.
- Sellers lose equity and earn less money on their most important investment, and often PTFs are hidden from consumers who are likely to learn about them just days before closing.
- PTFs make it more difficult to obtain clear title and make the transfer of property more costly and less certain.
- The legality and enforceability of these covenants is questionable and legislation that prohibits them is a proactive measure to protect consumers.
3) No new taxes or fees on the Real Estate Industry.
In North Carolina, we are facing economic challenges. Even our real estate sector, historically the most stable and vibrant segment of our state’s economy, is dealing with adversity. One industry cannot repeatedly be called upon to fund a disproportionate share of services and programs provided by state and local governments.
We oppose any new taxes or fees on REALTORS® or taxes and fees that negatively impact the real estate market, such as taxing REALTOR® services, increasing the privilege license tax, real estate transfer taxes, impact fees, increasing taxes on Limited Liability Companies, and changes to or elimination of the mortgage interest deduction.