TAVMA writes letter to delay paying appraisers reasonable fees - Says VA Fees " . . . artificially inflate appraisal fees in most markets"

Appraisers  . . . please read a letter written by Jeff Schurman, Executive Director of TAVMA - Title/Appraisal Vendor Management Association to the Board of Governors of the Federal Reserve System urging them to delay implementation of the appraisal fee provision in Title XIV of the Dodd-Frank Act. 

Download TAVMA FEE OBJECTION LETTER 8-2010

They are asking the FRB for sufficient time to define and analyze the implications of the "customary and reasonable" appraisal fee provision of the Act. 

Translation...AMC's don't want to comply with this legislation and pay appraisers a fair fee.

The TAVMA letter supports a HUD FAQ clarification in defining what a customary and reasonable fee should be:

The letter claims - 

"Yet, only one agency, the Veterans Administration (VA), publishes an appraisal fee schedule, (available at: http://www.benefits.va.gov/homeloans/fee_timeliness.asp ). These fees, however, are higher than many consumers will expect to pay in a retail mortgage transaction. 

Moreover, VA loan appraisal fees do not purport to be “customary and reasonable” for non-VA loans. Rather, they reflect “maximum allowable fees for the appraisal type” according to the VA website. Thus lenders, AMCs, and appraisers that use the VA fee schedule are very likely to distort (by artificially inflating) appraisal fees in most markets.

This could become a self-perpetuating problem, as higher “customary and reasonable” fees for non-FHA work may have the effect of increasing VA appraisal fees resulting in a vicious cycle."

Their Conclusion 

The final implementing regulation must consider these complex issues before establishing a workable and accurate set of “customary and reasonable fees.” Unfortunately, a credible source of “objective third-party” fee information simply does not exist at this time. 

The premature adoption of the fee provision will cause unanticipated harm [to] AMCs, lenders, and consumers, and likely will adversely affect competition among appraisers.

Read the full letter here:  Download TAVMA FEE OBJECTION LETTER 8-2010