It has been brought to our attention by some of our appraisers in Maryland that the City of Baltimore, MD is requiring that every appraiser submit a copy of each appraisal they complete in Baltimore City to the Department of Labor & Licensing for their potential review.

The Department has said that the review would be accomplished by a representative of a "government agency" relative to fraud investigation... One of our appraisers says he has a friend at the DLL, and they're targeting not only appraisal companies, but loan officers as well.

Does anyone know anything about this? Could this be a privacy issue?

Suwannee: We do some lending in Baltimore City but I haven't heard anything about this. If you hear anything more about it, I would be very interested in some details.

I haven’t heard about this, (doesn’t surprise me) but that doesn’t mean it doesn’t exist.

Background: In recent years Balto has had a serious problems of “flipping.” This is when an unscrupulous property buyer joins with an unscrupulous appraiser and they do variations of the following. Buyer buys “rundown” property for low amount, throws a coat of paint here and there, maybe fix a leaking pipe, then when it is re-appraised (by the unscrupulous appraiser), now the property is “worth” a mint. Then buyer sells the property. Buyer buys another “rundown” property….

Balto is still battling this problem.

We lend in the city and I've never heard of this. If it were true I'm sure my appraisers would be irritated and have let me know by now.

http://www.dllr.state.md.us/license/real_est_app/reanews.htm#bacity

Reporting Requirement Involving Residential Real Estate Located Within the City of Baltimore

As was previously announced in the Commission’s memorandum of December 19, 2003, Maryland state law now requires the quarterly reporting of certain information on appraisals of residential properties located within the City of Baltimore. The first reporting cycle, covering the 10/1/03-12/31/03 period, went reasonably smoothly. Some recurring questions from reporting appraisers, however, indicated a need for some clarifying information.

Please be advised that the reporting requirement involves only one-to-four family residential real estate appraised for mortgage underwriting purposes (purchase and refinance). The City of Baltimore as the sponsor of the legislation creating the requirement, has requested this limitation to appraisals being reported. Appraisals for settling estates, establishing asking prices, assisting a buyer in preparing a bid, supporting litigation, or for other such non-mortgage related purposes are not to be included in the report.

There also appears to be some confusion as to the purpose of the reporting system. The statutory language is clear and exact, "the report shall be open for inspection only to representatives of government agencies for investigation of fraudulent practice." This disclosure requirement is consistent with the Confidentiality Rule of USPAP, which specifically permits disclosure to "state enforcement agencies and such third parties as may be authorized by due process of law". Both the Commission and the City will strictly observe these access provisions.

The burden this places on appraisers is well understood, and the requirement was established only after extensive consultation with members of the appraisal profession, and only after it was determined that it was necessary in the effort to address the problems of property flipping and predatory lending. The Commission appreciates your timely filing and ongoing cooperation with this statutory requirement. Questions regarding the appraiser reporting system should be e-mailed to kenneth.strong@baltimorecity.gov.

With the arrival of April 2004, we have now entered the reporting cycle for eligible appraisals completed between 1/1/04 and 3/31/04. We urge you to use the electronic process available to you at the Commission’s web site at www.dllr.state.md.us/license/occprof/reappr.html. Licensees and certificate holders wishing to submit a non-electronic report should forward their submittals in writing to Kenneth Strong, Department of Housing and Community Development, 417 East Fayette Street, Baltimore, MD 21202.

Thanks Anon...I guess most of us have not heard this because the reporting is the responsibility of the appraiser, not the financial institution.

You're welcome....I forgot to log in when I posted, and I wouldn't have normally known this but I was at the MD appraisal site looking into getting a temp certification for an upcoming assignment. I was pretty amazed when I saw it...seems like a pretty significant burden on the appraiser, when you figure that a decent residential appraiser is dealing with volume. Ah well.... I remember all of us whining when USPAP came into existance too. All ultimately for good reason.