SB2407 HD1

THE SENATE	S.B. NO.	2407
TWENTY-FOURTH LEGISLATURE, 2008		S.D. 1
STATE OF HAWAII		H.D. 1

A BILL FOR AN ACT

RELATING TO REAL ESTATE APPRAISALS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 412, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§412: - Improper influence of real estate appraisers. (a) A financial institution shall not improperly influence or attempt to improperly influence the development, reporting, result, or review of a real estate appraisal if the financial institution's compensation is dependent on or affected by the value conclusion generated by the appraisal.

(b) Subsection (a) shall not preclude a financial institution from asking a real estate appraiser to do any of the following:

(1) Consider additional, appropriate information relating to the real property;

(2) Provide further detail, substantiation, or explanation for the real estate appraiser's value conclusion; or

(3) Correct errors in the appraisal report.

(c) If a financial institution violates this section within the course and scope of its duties, the commissioner may pursue enforcement actions pursuant to article 2, part III and order the financial institution to forfeit and pay an administrative fine pursuant to article 2, part VI.

(d) Nothing in this section shall be construed to authorize communications that are otherwise prohibited under existing law.

(e) For purposes of this section, "improperly influence" includes but is not limited to:

(1) Communications with the appraiser that suggest or require an appraised value at or above a specific dollar amount; and

(2) Communications that suggest or require the appraiser to include or exclude specific comments or factors in the appraisal."

SECTION 2. Chapter 454, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§454- Improper influence of real estate appraisers. (a) No mortgage broker or solicitor shall improperly influence or attempt to improperly influence the development, reporting, result, or review of a real estate appraisal if the mortgage broker's or solicitor's compensation is dependent on or affected by the value conclusion generated by the appraisal.

(b) Subsection (a) shall not preclude a mortgage broker or solicitor from asking a real estate appraiser to do any of the following:

(1) Consider additional, appropriate information relating to the real property;

(2) Provide further detail, substantiation, or explanation for the real estate appraiser's value conclusion; or

(3) Correct errors in the appraisal report.

(c) Nothing in this section shall be construed to authorize communications that are otherwise prohibited under existing law.

(d) For purposes of this section, "improperly influence" includes but is not limited to:

(1) Communications with the appraiser that suggest or require an appraised value at or above a specific dollar amount; and

(2) Communications that suggest or require the appraiser to include or exclude specific comments or factors in the appraisal."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on January 1, 2050.