The Banking, Finance and Insurance committee in the California State Senate is considering Senate Bill 1000 (Correa) sponsored by the California Association of Realtors that would require lenders to accept an appraisal, even if that appraisal had been obtained and paid for by the buyer's previous lender. Senate Bill 1000 would make appraisals "portable" if a buyer must change lenders. As you would expect, the big banks are opposing this bill with full force and strong lobbying efforts.
The big banks have a financial incentive to oppose Senate Bill 1000. Many lenders have spun off Appraisal Management Companies (AMCs) and these AMCs have become a good income stream for the big banks. Current law permits, but does not require, the big banks to use an appraisal ordered by a different lender...so most require a second appraisal, even though the buyer has already paid for an appraisal on the subject property.
Senate Bill 1000 would change that loophole and require that an existing appraisal on a subject property be honored, with no further cost to the buyer. FHA already requires that appraisals be "portable" as of January 1, 2010...meaning an FHA approved lender accept an appraisal completed by another FHA approved lender, when the borrower switches from one lender to another.
Senate Bill 1000 is coming up for a vote in the California Senate Banking, Finance and Insurance committee on May 5, 2010. I encourage all readers in California to call Senator Ron Calderon at 1-800-672-3135 and enter the number 179535555 to express your support for this bill.
Appraisals cost between $200 and $500 and I believe it is unfair and unnecessary to force a buyer to purchase another appraisal on the same property if they must switch lenders. It is not just the additional cost to the buyer. The additional delay in getting that second appraisal can mean additional hardship for the buyer also. Please call Senator Ron Calderon at the number above to express your support for Senate Bill 1000.
Im an appraiser. There should be allowances for the appraiser to charge a fee for the processing of the report and/or any changes, updates, etc that need to be made. If I was an author of a book you would expect me to charge for a copy to you. Especially of any extra work is needed.