Author: Turner, Eric
Last saved by: Torres-Recinos, Martha
Company: DORA

DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
BOARD OF REAL ESTATE APPRAISERS
4 CCR 725-2

NOTICE OF PROPOSED PERMANENT RULEMAKING HEARING
November 7, 2019

		
CHAPTER 18:  PROFESSIONAL STANDARDS – APPRAISAL MANAGEMENT COMPANIES

18.1	An appraisal management company must have and follow a written policy in place regarding the annual audit of appraisals completed for Colorado assignments during the previous Reporting Period. The policy must have an effective date and memorialize the dates any modifications are made. The policy must outline, at a minimum, the following: 
 	 
A.	Appraisal Selection. The audit sample must be randomly selected and a USPAP Standard 3 Review must be performed on not less than two percent (2%) of all appraisal reports performed by appraisers for the appraisal management company during the previous Reporting Period.  A minimum of at least one (1) USPAP Standard 3 Review must be performed for each appraiser who completed a Colorado appraisal assignment during that Reporting Period.
B.	Risk-Based Reviews. If an appraisal management company maintains a risk-based review process, the appraisal management company is required to comply with Board Rule 18.1(A) of these Rules only for those appraisers for whom a USPAP Standard 3 Review was not performed under the risk-based appraisal review process. 
C.	Review Criterion. The appraisals must be evaluated for compliance with state and federal regulations, including the USPAP. 
D.	Reviewer Qualifications. The individual(s) performing the audit of the appraisals must possess a certified credential in this state or any jurisdiction and be competent to appraise residential real estate. 
E. 	Appraisal Deficiencies. The appraisal management company must have procedures in place to address material deficiencies that affect the value conclusion or the credibility of the report with the appraiser. Material violations of the USPAP or the Colorado Real Estate Appraiser Licensing Act must be reported to the Board. 
The Board may evaluate an appraisal management company’s compliance with its own audit policies during an investigation.

A hearing on the above subject matter will be held on Thursday, November 7, 2019, at the Colorado Division of Real Estate, 1560 Broadway, Room 100-C, Denver, Colorado 80202 beginning at 9:00 a.m. 

Any interested person may participate in the rulemaking through submission of written data, views and arguments to the Division of Real Estate. Persons are requested to submit data, views and arguments to the Division of Real Estate in writing no less than ten (10) days prior to the hearing date and time set forth above. However, all data, views and arguments submitted prior to or at the rulemaking hearing or prior to the closure of the rulemaking record (if different from the date and time of hearing), shall be considered.

Please be advised that the rule being considered is subject to further changes and modifications after public comment and formal hearing.