GUEST AUTHOR: Dave Towne, Certified Real Estate Appraiser - Towne Appraisals. 16422 Britt Rd., Mount Vernon, WA Phone: 360.708.1196 eMail: email@example.com Web:http://www.TowneAppraisals.com
Appraisers…. AppraiserForum news received [last week] about potential changes to the Federal Reserve Bank’s Interim Final Rule (IFR) concerning Customary and Reasonable fees is contradictory, per the info below . . . . .
[Editor's Note: The IFR provides two alternative ways in which lenders, their agents, and appraisal management companies will be presumed to be in compliance with the Customary and Reasonable Fee rules.]
Presumption one requires that the amount of compensation is reasonably related to recent rates for appraisal services performed in the geographic market of the property. Fees paid by AMCs are specifically included in this approach. Moreover, necessary fee adjustments are to be made for type of property, scope of work and fee-appraiser qualifications, etc. In addition, there can be no anti-competitive action in violation of federal law such as price-fixing or restricting others from entering the market. This is an explicit requirement of Dodd-Frank designed to prevent collusion or market dominance among AMCs to depress appraiser fees.
Presumption two relies on objective independent, third-party information, including fee schedules, studies and surveys. This approach excludes AMC fees.
By April 1, lenders and AMC’s must decide which method or compliant combination/hybrid they will use in determining customary and reasonable fees for fee appraisers.]
The conflicting messages are these:
FIRST: From a Virginia appraiser, circulated to nationwide appraisers on 4/09/2011:
"I have had a rather lengthy conversation with a highly placed source in DC in the Appraisal world this afternoon. This person and I have known each other for decades. I promised not to reveal his/her name.
This individual gave us some rather valuable information. He/she has been in direct contact with folks at the Federal Reserve…and they have heard a BUNCH from appraisers, Realtors, and others regarding the Reasonable and Customary fee uproar.
The Fed had first determined they were done, finished, and walking away from this issue. They are now RE-THINKING their final interim rules as we speak.
Please contact the Fed. This is indeed working….the louder and harder we complain the better it will be. MORE and MORE of us need to take just 5 minutes to write and mail an explanatory complaint letter. [I modified this to say LETTER, not e-mail]"
You need to send your letter today to the Federal Reserve Bank bureaucrats who modified the intent of the Dodd-Frank law in the regulation they wrote. Tell the FRB how you really feel about AMC’s being allowed to steal a portion of your former income to line their own pockets:
Mail to:Jennifer Johnson, Secretary, Board of Governors – Federal Reserve System, 20th Street & Constitution Ave. NW, Washington, DC 20551 (Reference: the Final Rules for Appraiser Independence, within the Dodd-Frank Law).
SECOND: From an Oregon appraiser on The AppraisersForum, posted 4/07/2011:
I got a call back from an attorney at the Fed Reserve Board today regarding any further clarification of the Dodd Frank legislation.
Basically, they understand there was A LOT of comments and confusion arising from their interim rule, which I did confirm is now the final rule as of 4/1/2011. They want to comment further to help clarify their interpretation of Appraiser Independence and C&R fees, BUT they can't.
It seems that there is a brand new agency in the process of being set up called the Consumer Financial Protection Bureau. [This is true.] Since many of the staff from the Fed who worked on this issue are going to be transferred to this new CFPB agency there will be no further comments about the final rule until they are up and running. This is to happen in late July of this year.
There are apparently many agencies that will be working with and answering to the CFPB and the attorney from the Fed said it will likely be several months after they open before they offer any more comments on the C&R fee issue in order to give all the agencies time to report in to this new CFPB.
So, everyone should keep pressure on the CFPB when they go live. They have a website set up at http://www.ConsumerProtection.gov. [Actually it’s: http://www.consumerfinance.gov/ - I could find NO mailing address or e-mail address on this site] I've not checked it out yet to see if there is any contact info yet or not....kicking the can down the road it looks like!
GUEST AUTHOR: Dave TowneTowne Appraisals Mount Vernon, WA 360-708-1196 & Appraiser Education Service