CHARLESTON, W.Va. (AP) -- The West Virginia Legislature will consider a bill requiring appraisal management companies to register with a state board.
The companies are meant to serve as a buffer between banks and appraisers. A legislative legal counsel says when mortgage lending banks deal directly with appraisers, there's an incentive for appraisers to over-value properties, so that banks can issue larger mortgages.
The 2012 federal Dodd-Frank financial reform law requires regulation of appraisal management companies.
The proposed bill would require appraisal management companies to be independent, to meet minimum standards, and to post a bond with that would reimburse potential consumer complaints. Ownership and management would have to submit to criminal background checks.
A rough draft of the bill was presented to legislators during interim sessions on Tuesday.