Machado Bill Outlawing Inflated Appraisals Signed
California Political Desk
October 08, 2007
(SACRAMENTO, CA) – Senator Michael J. Machado (D-Linden), Chair of the Senate Banking, Finance & Insurance Committee, announced Friday that Governor Schwarzenegger signed Senate Bill (SB) 223. Machado introduced SB 223 in February, as part of a broad-based response to the problems pervading California’s mortgage and housing markets. The bill, an urgency measure that becomes effective immediately upon the Governor’s signature, will help prevent real estate professionals from colluding to inflate property appraisals.
I have been involved in efforts to curtail predatory and abusive real estate lending practices for nearly a decade,” said Machado. “During that time, I have heard numerous claims about the insidious practice of appraisal inflation. More recently, inflated appraisals have been identified as a contributing factor to the subprime mortgage meltdown California is currently experiencing. I introduced SB 223 to stop the practice, once and for all.”
SB 223 is the first California or federal law that explicitly forbids persons involved in a real estate transaction from pressuring an appraiser to ‘hit’ a target value. The bill punishes violators with license suspension or revocation and with potential civil action. “I expect SB 223 to act as both a deterrent and a mechanism for punishing those who violate its provisions,” concluded Machado.
SB 223 was supported by several industry groups and consumer advocacy organizations, including the Appraisal Institute, the American Society of Appraisers, the California Mortgage Bankers Association, Countrywide, the California Association of Mortgage Brokers, the Fair Lending Alliance, and the Greenlining Institute.
Senator Machado represents the Fifth Senate District, which includes the cities of Stockton, Tracy, Manteca, and Lathrop in San Joaquin County, as well as the counties of Yolo and Solano in the north, along with portions of Sacramento County.
I have been involved in efforts to curtail predatory and abusive real estate lending practices for nearly a decade,” said Machado. “During that time, I have heard numerous claims about the insidious practice of appraisal inflation. More recently, inflated appraisals have been identified as a contributing factor to the subprime mortgage meltdown California is currently experiencing. I introduced SB 223 to stop the practice, once and for all.”
SB 223 is the first California or federal law that explicitly forbids persons involved in a real estate transaction from pressuring an appraiser to ‘hit’ a target value. The bill punishes violators with license suspension or revocation and with potential civil action. “I expect SB 223 to act as both a deterrent and a mechanism for punishing those who violate its provisions,” concluded Machado.
SB 223 was supported by several industry groups and consumer advocacy organizations, including the Appraisal Institute, the American Society of Appraisers, the California Mortgage Bankers Association, Countrywide, the California Association of Mortgage Brokers, the Fair Lending Alliance, and the Greenlining Institute.
Senator Machado represents the Fifth Senate District, which includes the cities of Stockton, Tracy, Manteca, and Lathrop in San Joaquin County, as well as the counties of Yolo and Solano in the north, along with portions of Sacramento County.
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