2009 California Civil Code - Section 1917.140-1917.142 :: Article 4. Determination Of Fair Market Value

CIVIL CODE
SECTION 1917.140-1917.142

1917.140.  The borrower may, at any time for the purpose of
facilitating a sale of the property, request the lender to stipulate
the minimum amount which the lender considers to be the fair market
value of the property for the purposes of this chapter. The lender
shall advise the borrower within 10 working days of the receipt of
such request of the lender's estimate of the minimum fair market
value. The estimate shall remain effective for purposes of this
section for 90 days. For the purposes of this section and Section
1917.141, a sale of the property shall be deemed to have occurred
within the 90-day period if there is a valid contract entered by an
offer and acceptance within the 90-day period for the sale of the
property. The lender's stipulation shall remain effective for an
additional 60 days following execution of the sale contract to permit
completion of the sale and close of escrow.
   The lender shall not be liable to the borrower or any other party
on account of damages alleged as a result of providing the
stipulation or estimate required by this section if such stipulation
or estimate is made in good faith. Evidence of lack of good faith
shall include, but not be limited to, a showing that the lender has
willfully or repeatedly overrepresented the fair market value of
other properties in similar situations, applying equitable principles
to those determinations. The lender shall be conclusively presumed
to have acted in good faith and no action may be brought or
maintained against a lender which arises out of the provision by the
lender of such stipulation or estimate, if the lender relied upon an
appraisal of an independent appraiser approved by the Federal
National Mortgage Association.

1917.141.  (a) In the case of a sale for cash within 90 days after
the lender stipulates, under the provisions of Section 1917.140, a
minimum amount which the lender considers to be the fair market value
of the property, the fair market value shall be the gross sale
price, unless the gross sales price is below the minimum amount
stipulated by the lender and the lender contests in writing the
reasonableness of the gross sale price in relation to the fair market
value within 10 working days of the lender's receipt of notice of
the gross sale price from borrower, in which case fair market value
shall be the greater of gross sale price or the amount determined
under Section 1917.142.
   (b) In the case of a sale for cash where the borrower has not
requested the lender under the provisions of Section 1917.140 to
stipulate to the minimum amount which the lender considers to be the
fair market value of the property or where the stipulated minimum
amount was provided by the lender more than 90 days prior to the date
of sale, fair market value shall be the gross sale price, unless
lender contests in writing the reasonableness of the gross sale price
in relation to the fair market value within 10 working days of the
lender's receipt of notice of the gross sale price from borrower, in
which case fair market value shall be the greater of gross sale price
or the amount determined under Section 1917.142.
   (c) In the case of a sale which includes consideration to the
seller other than cash, fair market value shall be as determined
under Section 1917.142.
   (d) In the case the shared appreciation loan is prepaid in full,
or upon acceleration of the shared appreciation loan upon default, or
upon maturity of the shared appreciation loan, fair market value
shall be as determined under Section 1917.142.

1917.142.  When Section 1917.141 requires the application of this
section, the fair market value shall be determined as the average of
two appraisals of the property performed as described in this
section. If possible, the appraisals shall be based on the sale
prices of comparable properties in the market area sold within the
preceding three-month period. The appraisals shall be made upon
request of the lender by two independent residential appraisers, one
to be selected by the lender and one by the borrower. Each appraiser
shall be approved by the Federal National Mortgage Association. The
cost of the appraiser selected by the lender shall be borne by the
lender, and the cost of the appraiser selected by the borrower shall
be borne by the borrower, unless the average of the two appraisals
equals or is less than the gross sale price of the property, in which
case the lender shall also pay the fee of the borrower's appraiser
up to two hundred dollars ($200). If either of the appraisers
determines that the gross sale price does not reasonably reflect the
fair market value of the property, or, in the case of a sale for
which appraisal is required by this section, then the fair market
value of the property shall be determined as the average of the two
appraisals. If the borrower fails to select a qualified appraiser
within 15 days after the lender has notified the borrower in writing
of the lender's request for an appraisal of the property, the reasons
therefor, and the borrower's option to select an independent
appraiser within 15 days after the lender's request is submitted to
the borrower, the lender may designate the second appraiser, provided
the lender's request informs the borrower of this time limitation,
and that the lender will select an appraiser on behalf of the
borrower in the event the borrower fails to designate an appraiser,
with consequent cost to the borrower. If pursuant to this section the
lender designates the second appraiser, the cost of both appraisals
shall be borne equally by the borrower and lender. If in any case the
property has been damaged (other than normal wear and tear) and the
damage has not been fully repaired, the determination of fair market
value shall be based on the condition of the property not including
the damage.
   Nothing in this section shall preclude the borrower and lender
from establishing the fair market value of the property by mutual
agreement in lieu of appraisals pursuant to this section.


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