Appraisal Scoop

Are Appraisers Too Independent For Their Own Good?

GUEST POST: Lisa Alvarez,  The American Guild of Appraisers 800-660-1835 ext 2.  The American Guild of Appraisers Weekly Conference Call When: Every Tuesdays 2pm – 2:30pm Eastern Time Where: 559-546-1000, Password 382795.  

As a result of the Home Valuation Code of Conduct (HVCC), and the current Financial Reform Act of 2010 (aka Dodd-Frank), appraisers have had to work under difficult circumstances. According to recent statistics, upwards of 80% of lending appraisal assignments are being funneled through Appraisal Management Companies (AMCs). These AMC’s are enforcing unreasonable working conditions on appraisers by unrealistically reducing the completion time for appraisal assignments, adding exhaustive addenda requirements, while reducing in half the typical fee paid to the appraiser.

Appraisers are now faced with big banks (aided by misguided government interpretation of Dodd-Frank) determining what should be a reasonable and customary fee. Since April 1, 2011, AMCs have been telling appraisers to expect yet lower fees for their services. AMC’s continue to rack up huge profits on the backs of consumers and appraisers. To add insult to injury, the transparency of appraisal service fees to the consumer has become a joke.

From my experience over the past few years as the legislative liaison for two appraisal organizations, I have come to realize: “The very thing we value, our independence, has been detrimental to our profession.” During the past few weeks I’ve had the opportunity to speak with a multitude of appraisal organizations, state coalitions, AI chapters, as well as individual appraisers. The one constant I hear from leaders of these organizations is that they have a difficult time getting appraisers involved. To quote myself “We are too independent for our own good.” 

National appraisal organizations have been working on the behalf of appraisers for many years. With members spread out between a collective of different organizations, the appraisal industry has had minimal success protecting our profession. We lack the necessary funding to influence legislature at both the state and federal levels. Up to now, other lobbying organizations (lenders and AMCs) have been the Goliath to our David.

So what can we do? “With so many small organizations representing appraisers, we don’t have a strong and collective voice,” said Coleen Morrison, Standing President of the MD Chapter of AGA. “We needed a voice that we haven’t had for the past 25 years. A voice that allows us to come together so we can be more powerful and better able to represent the interests of appraisers.”

The American Guild of Appraiser (AGA) /Guild 44 of the Office and Professional Employees International Union (OPEIU)/AFL-CIO, based in Maryland, near Washington, DC, could be our answer.

The AGA is a non-traditional union that represents independent professionals. The AGA does not engage in collective bargaining, strikes, and does not enforce closed shops. The AGA does not negotiate contracts, does not have shop stewards, and does not have any oversight regarding its member’s work products. What we have is the backing of over 10 million members within the AFL-CIO and 110,000 within the OPEIU. With these numbers, we have a collective voice. AGA will encourage professionalism and communication between all professional appraisal organizations. With the backing of the AFL-CIO we continue to play a vital role in fighting legislation and regulation that supplants and marginalizes the professional appraiser. We are practicing real estate appraisers who are giving up our time and talents for the appraising profession, for you.

The American Guild of Appraisers is working to further legislation at the state and federal level to better regulate AMC activities and to secure the independent role and compensation of the professional appraiser. 

“We have to fight for the integrity of the appraisal process, as well as to preserve our industry, to stop it from being swallowed up and lost,” said Colleen Johansen, AGA vice president. “We are not going to let that happen, we will fight for our members.”

Peter Vidi, Guild 44 president states “It’s our mission is to ensure that professionals have a collective voice, whether it’s negotiating a contract or representation on the legislative front. That’s what AGA is all about, and that’s the kind of strong collective voice that the appraisers have as part of Guild 44. The credo of the American Guild of Appraisers is, ‘We Value America’s Future.’

Appraisers take the first step and join us on our weekly conference call. Let’s start working together with one strong collective voice. If you don’t get involved now, than yes, “we are too independent for our own good.”

The American Guild of Appraisers Weekly Conference Call is every Tuesday from 2:00pm – 2:30pm Eastern Time. Call 559-546-1000. The password is 382795  - For more information email: lalvarez@appraisersguild.org , or call 800-660-1835.

YouTube: UAD - The Uniform Appraisal Dataset in TOTAL 2011

Source: http://www.alamode.com/Labs/projects/UMDP/default.aspx

AMCs, Banks May Be Misinterpreting “Customary and Reasonable”: Fed Staff

Source - Appraiser News Online Headlines - Updated 4/20/2011

Some banks and appraisal management companies may be misinterpreting Presumption 1 of the Federal Reserve’s Interim Final Rule “customary and reasonable” fee language, the Fed’s staff said April 9 at the Association of Appraiser Regulatory Agencies spring conference in San Antonio.

In a presentation covering the Interim Final Rule, representatives from the Federal Reserve indicated that utilizing AMC-involved assignments when assessing fees as part of a six-part test under Presumption 1 may be inconsistent with the Rule, which became effective on April 1. Federal Reserve officials indicated that AMC fees were not to be included in any assessment of recent fees paid to appraisers.

Further, officials suggested that use of blanket schedules for fees within states may not rise to the requirements to satisfy both “customary” and “reasonable” as defined by Presumption 1.

Separately, the officials also reiterated the provision of the Interim Final Rule that states that just because an AMC requires an appraiser to sign a document indicating that the fee that they are paid for an assignment is customary and reasonable does not necessarily satisfy the AMC’s responsibility to ensure that an appraiser is actually paid a customary and reasonable fee. 

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Are You Paying $500 for an Appraisal That Costs $200?

According to a Fox Business article by Kate Rogers:

According to Ken Chitester, director of Communications at the Appraisal Institute, new Federal Reserve regulations that went into effect earlier this month have created a loophole for appraisal management companies (AMCs), allowing them to pocket more on appraisals—ultimately hurting the consumer. Appraisals typically average around $500, but appraisers themselves are being paid about half that cost, with the other half going into the AMC's pocket, according to the Appraisal Institute.

Chitester said the loophole when it comes to the Federal Reserve's new regulations -- which mandate that "customary and reasonable" fees be paid to appraisers – is that the AMCs determine what these customary and reasonable fees are, including in the portion they intend to take. The fees look higher and are not broken down to explain who is getting what portion of the money. This was never a part of Dodd-Frank, he said, which was signed into law in July 2010 with the goal of improving the financial regulatory system after the recession, and intended to bring back the most qualified appraisers into the field.

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GEORGE: I'll do anything, Mr. Potter, please. Please help me with the Appraisal Fee. My wife and kids-- they need a place to live!  The appraiser told me he only got $200 dollars!!!  Can't ya call someone??

POTTER: I'm NOT calling the Appraisal Managment Company. Five hundred dollars! Five hundred dollars? You know something, George?  That's how THEY make their living.  Now, get out of here! Get out!

HUD Embraces Implementation of the Uniform Appraisal Dataset [UAD]

" In December 2010, Freddie Mac and Fannie Mae (the GSEs) published the full details of the Uniform Appraisal Dataset (UAD). The publication of the UAD, which defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields, marked a major milestone in our effort to improve the quality and consistency of appraisal data delivered to the GSEs. " - Freddie Mac Update

The Spring 2011 (Issue 3) of FHA APPRAISER embraces that initiative with their article "Uniform Appraisal Dataset [UAD]

In an effort to enhance appraisal data quality and consistency and to promote the collection of electronic appraisal data, Fannie Mae and Freddie Mac (the Government Sponsored Enterprises or GSEs) have developed the Uniform Appraisal Dataset (UAD). The UAD modifies 4 of the industry standard appraisal reporting forms: the URAR, the Individual Condominium Unit Report, the Exterior Only

Residential Inspection Report and the Exterior Only Inspection Individual Condominium Unit Report. Fannie Mae and Freddie Mac will require appraisals reported on one of these four appraisal reporting forms to be in compliance with the UAD for all conventional loans delivered to the GSEs on or after September 1, 2011. The UAD is part of the Uniform Mortgage Data Program (UMDP) which also includes the

Uniform Loan Delivery Dataset (ULDD) and the Uniform Collateral Data Portal (UCDP). As the ULDD and the UCDP are for submission and electronic collection of appraisal and loan data related to conventional loans delivered to the GSEs, this article will only address the UAD which will directly impact FHA Roster Appraisers. When performing appraisals reported on the URAR and the individual condominium unit report form, FHA Roster Appraisers will be required to submit reports which are UAD compliant. FHA does not permit the use of either of the two exterior only inspection reporting forms.

The UAD will standardize the definitions of select key appraisal data elements such as property condition and quality of construction as well as the describing the view which will prevent appraisers from inputting descriptions such as average in the field for view in the Site Section or average quality in the Improvements Section of the report. UAD compliant appraisal reporting forms require the following information that was never explicitly required before:

1. Days on market for subject property and the comparable sales
2. Specifically defined condition and quality ratings
3. Status of improvements to kitchen and bathrooms
4. Sale type for the subject property and each comparable sale

Appraisal report software form providers have incorporated the UAD requirements into their form software and UAD compliant appraisal reporting forms will be available on an industry wide basis this Spring.

FHA Roster appraisers can become familiar with the UAD field specific requirements detailed in Appendix D of the Uniform Mortgage Data Program by visiting either of the GSEs’ web sites: Fannie Mae or Freddie Mac

FHA plans to release guidance concerning the use of the UAD appraisal reporting forms later this year.

Source: FHA Appraiser - Spring 2011 [Issue 3]

Where To Direct Questions and Comments Regarding Customary and Reasonable Fees

 
The Appraisal Sub-Committee (ASC) has updated their website with the following information:

Where To Direct Questions and Comments Regarding Customary and Reasonable Fees

Friday April 15, 2011

The appropriate agency to receive your concern about a creditor’s compliance with the Truth in Lending Act (TILA), including the creditor or the creditor’s agent paying an appraiser a customary and responsible fee, is the agency that enforces TILA for the creditor.

If the agent or appraisal management company (AMC) is affiliated with a federally-regulated creditor, the appropriate agency to receive complaints against the AMC is the affiliated creditor’s federal regulator.

If the agent (or AMC) is not affiliated with a federally-regulated creditor, the appropriate agency to receive the complaint is the Federal Trade Commission.

There are two websites that you can use to find the federal regulator for a creditor:

• Federal Reserve System – National Information Center website: http://www.ffiec.gov/nicpubweb/nicweb/nichome.aspx  ; and
• FDIC website at the “Bank Find” webpage: http://www2.fdic.gov/idasp/main_bankfind.asp  .

Questions regarding the appropriate interpretation of the Truth in Lending Act, including those on customary and reasonable fees, should be directed to the Federal Reserve Board at http://www.federalreserve.gov/feedback.cfm .

Source: ASC

Appraisers launch online petition against use of AMC fees as "Customary and Reasonable"

Appraisal Scoop is seeking feedback from its readers to help inform the Federal Reserve Board, U.S. Congress, Federal Financial Institutions Examination Council, and the Federal Trade Commission of issues and concerns arising from the potential violations of the prohibitions in TILA against the use of AMC fees as the basis for determining reasonable and customary appraisal fees.

PETITION

On October 18, 2010, the Federal Reserve Board announced an interim final rule to Regulation Z of Title 12, also known as the Truth in Lending Act (TILA). One of the elements to Regulation Z is a binding requirement upon creditors and appraisal management companies to ensure that appraisers who are not employees of creditors or of the appraisal management companies receive customary and reasonable payments for their services.

In preparing this interim final rule, the Federal Reserve Board did not specifically identify which appraisal fee schedules, surveys or studies that would be appropriate to designate as a ‘‘safe harbor’’ for creditors and their agents to comply with the reasonable and customary fee requirements of TILA. In lieu of identifying these schedules, surveys or studies, the Board basically offered two alternatives to creditors and appraisal management companies; either conduct their own surveys of fees for a locale and operate off the presumption that those surveys are reasonably accurate (Presumption 1), or rely on other fee surveys or studies conducted by objective third parties such as government agencies, academic institutions, and private research firms and rely on the presumption that they are accurate (Presumption 2).

The specific language of both (TILA) and the FRB’s interim final rule specifically exclude the use of AMC fees as the basis for identifying the thresholds for reasonable and customary appraisal fees. In fact, the final interim rule specifically refers to this prohibition several times. (Read More - Appraisal Scoop)

It is our assertion that there is no language in the "Presumption 1" paragraphs that indicate that either Congress or the Board intended to allow the AMCs to include their own fees or those of other AMCs as the basis for reasonable or customary appraisal fees. We believe it is obvious that the term:

"...recent rates paid for comparable appraisal services..."

as stated in Presumption 1 *is not* synonymous with, nor should it be interpreted as:

"...recent rates paid by AMCs for comparable appraisal services..."

We also assert that ample evidence exists in the market in virtually all locales as to what local appraisers charge their non-AMC clients for such appraisal work. No AMC is compelled to actually wonder what fees the appraisers charge their non-AMC clients - all they have to do is pick up the phone and start asking.

As of the implementation date of the final interim rule, many appraisal management companies have made a good faith effort to comply with the requirements in TILA to ensure that the appraisers they engage are paid fees that are reasonable and customary for those markets. Some of these AMCs have accomplished this by employing Presumption 1 (conducting their own market surveys), while others have accomplished this by employing Presumption 2 (relying on other published fee schedules and surveys developed by objective third parties). Some AMCs have gone so far as to employ both methods as a means of ensuring their compliance. As appraisers, we applaud and support the good faith efforts of those AMCs that have chosen to adhere to the law as written.

Sadly, as of the implementation date of 04/2011, some AMCs have chosen to flaunt both the letter and specific intent of the law (TILA) as well as that of the interim final rule. Despite the specific prohibition against including AMC fees as part of those surveys, a few of the high profile AMCs have even gone so far as to erroneously assert that the final interim rule specifically allows them to reference their own fees and/or those of other AMCs in their surveys. This, despite the repeated references in TILA and the interim final rule to the contrary.

To the extent such violations are occurring in the market the results serve to undermine both the letter and intent of the law (TILA) as written. The “violator” AMCs have undermined the level playing field on which they compete in the market with other AMCs that are in compliance, not to mention seriously degrading the economic viability of the appraisers who actually perform the appraisals being used in these transactions. The damages to the professional appraiser community extend across all levels of experience and competency, and serve to induce some appraisers who work for the AMCs to attempt to compensate for these grossly substandard fees by sacrificing quality and due diligence for increased assignment volume. Obviously this has also had a negative impact on the utility of those appraisals as used by the creditors, not to mention the negative impacts on consumer interests and the federal banking regulatory interests.

Simply put, if a violator AMC is billing a consumer $500 or more for a comprehensive residential appraisal, that consumer’s interests cannot be well served on a consistent basis when that AMC makes their primary choice of appraiser based on a unilaterally imposed fee structure that is, in some cases, less than half of the prevailing rate being charged in the market to any other type of user. That some of the biggest AMCs are wholly-owned subsidiaries of the lending institutions they represent essentially amounts to an additional hidden fee being paid - by the consumers - to those lenders in those loan transactions.

We, the undersigned, represent a large number of licensed and certified real estate appraisers in the United States.

We respectfully request that the Board take action to publicly reiterate the prohibitions contained in both TILA and the Board’s interim final rule against the reliance on any survey, conducted by any party, that unlawfully includes AMC fees and purports to use them as the basis, in part or in whole, for establishing the thresholds for reasonable and customary appraisal fees as referenced.

In addition to public guidance, we also request that the Board act promptly and effectively to investigate complaints involving allegations of the blatant violations of these prohibitions as stated.

We thank you for your cooperation and assistance.

Sincerely, The Undersigned

Join the Petition "Event" on Facebook!!

Appraisal Subcomittee - Call To Action - C&R Fee Contacts

The following is from an email from Claire Brooks, Administrative Officer, Appraisal Subcommittee:

[Editor's Note: Claire suggests that appraisers check the www.ASC.Gov   web site in the next couple of days. as they will have more information/another comment.]

 "Due to the volume of e-mails received regarding this subject, your e-mail has been forwarded to me for response."

"The appropriate agency to receive your concern about a creditor’s compliance with the Truth in Lending Act (TILA), including the creditor or the creditor’s agent paying an appraiser a customary and reasonable fee, is the agency that enforces TILA for the creditor."

"If the agent or appraisal management company (AMC) is affiliated with a federally-regulated creditor, the appropriate agency to receive complaints against the AMC is the affiliated creditor’s federal regulator. "

"If the agent (or AMC) is not affiliated with a federally-regulated creditor, the appropriate agency to receive the complaint is the Federal Trade Commission. There are two websites that you can use to find the federal regulator for a creditor."

• Federal Reserve System – National Information Center website: http://www.ffiec.gov/nicpubweb/nicweb/nichome.aspx ; and
• FDIC website at the “Bank Find” webpage: http://www2.fdic.gov/idasp/main_bankfind.asp

"Questions regarding the appropriate interpretation of the Truth in Lending Act, including those on customary and reasonable fees, should be directed to the Federal Reserve Board at http://www.federalreserve.gov/feedback.cfm."

Regards, Claire Brooks - Administrative Officer Appraisal Subcommittee

1401 H Street, NW, Suite 760 Washington, DC 20005

(202) 595-7580 www.asc.gov

Contact Information for Dodd Frank

Federal Reserve Board complaint line: (888) 851-1920

Margaret Shanks (202) 452-3584 wants to hear from more appraisers at Fed Reserve Board Jamie Goodsen (202) 452-3667 - she's one of the attorneys that wrote the C & R provision on Dodd-Frank; recommend you call her only if you have something important to discuss.

To find you Congressman; https://writerep.house.gov/writerep/welcome.shtml.

To find your Senator; http://www.senate.gov/general/contact_information/senators_cfm.cfm

Federal Reserve Board; Jamie.Z.Goodson@frb.gov , Lorna.M.Neill@frb.gov  

The Consumer Financial Protection Bureau will be extremely important going forward.

MUST READ! Dodd-Frank Client Alert - Customary & Reasonable Fees

The following is a small portion of an excellent Client Alert newsletter from Morrison/Foerster, authored by Joseph Gabai dated Nov. 1, 2010.  Download 101101-Interim-Final-Rule-on-Real-Estate-Appraisals[1]

One of the key issues in the Interim Final Rule (IFR) of Dodd-Frank is the Duty to Pay Customary and Reasonable Compensation to Fee Appraisers (Section 226.42(f) of Regulation Z).  Basically it states that the duty of the creditor and its agents is to pay a customary and reasonable fee in the “geographic market of the property being appraised.”

The following are snipped from the full Client Alert noted above:

The interim final rule provides two separate presumptions of compliance with the customary and reasonable compensation requirement.

• If the creditor and its agents comply with either of the two presumptions, then it is presumed that they are in compliance with the customary and reasonable compensation requirement 
• Both of the two presumptions of compliance are rebuttable. The presumption may be rebutted with evidence that the amount of compensation paid to a fee appraiser was not customary and reasonable for reasons that are unrelated to the conditions for the presumption. How this will be done remains to be seen. If a presumption relied upon is successfully rebutted, this means that the customariness and reasonableness of the compensation is determined based on all of the facts and circumstances (i.e., without a presumption of compliance or violation)
• Comment: While the regulation does not require the creditor and its agent to comply with one of the two presumptions, in practice this is what most creditors ultimately are expected to do
• Comment: Both presumptions contain a fact-intensive determination process, which suggests that there may not be an easy way of being comfortably assured that the customary and reasonable compensation requirement is being met

First Presumption of Compliance. A creditor and its agents are presumed to be in compliance with the customary and reasonable compensation requirement if they conform to the following three-part process:

• First, the creditor or its agents must determine the amount of the fee that is reasonably related to recent rates paid for comparable appraisal services performed in the geographic market of the property being appraised. This requires the identification of “comparable appraisal services” being performed, which overlaps somewhat with the second part of the three-part process, below. Also, it requires an identification of the “geographic market” (see discussion above). “Recent rates” depend on the relevant facts and circumstances, but the Commentary states that rates charged within one year of reliance on the information generally will qualify

The Commentary also states that the creditor/agent may gather the information using a reasonable method, including a fee survey. Unlike the second presumption of compliance discussed below, the first presumption of compliance does not prohibit the inclusion of fees paid by AMCs in any such survey. In fact, the Board’s Supplementary Information expressly confirms that the regulation and Commentary do not prohibit this.

"This borders on the incredible, given the Dodd-Frank Act’s express prohibition on the use of such information in what has become the second presumption of compliance. Keep in mind that the presumptions are rebuttable, and a survey used to support the first presumption that includes AMC-paid fees could be challenged."

If a decision is made to accept this risk, and a survey used to support the first presumption includes AMC-paid fees, it would be advisable to determine that the overall results of the survey fairly represent the fees paid to fee appraisers in the relevant geographic market.

Finally, nothing in the regulation or Commentary prohibits a creditor from delegating the tasks required by the first presumption to an AMC. However, because the AMC is the agent of the creditor, the creditor presumably will have exposure for the acts or omissions of the AMC in this regard, and creditors should take steps to protect themselves accordingly (e.g., by obtaining appropriate representations, warranties, and indemnities in their agreements with AMCs)

• Second, once this amount is determined, it must be adjusted, as applicable, based on certain factors (i.e., type of property, scope of work, turnaround time for performance of the work, appraiser qualifications, appraiser experience and professional record, and appraiser work quality)

The need to consider the appraiser’s qualifications does not override federal or state laws prohibiting the exclusion of an appraiser from consideration for an appraisal assignment solely by virtue of membership or lack of membership in any particular appraisal organization. See, e.g., 12 C.F.R. §34.46(a) (OCC regulation). Note that Section 1473 of the Dodd-Frank Act will allow membership in a nationally recognized appraisal organization to be considered, but lack of membership may not be the sole bar against consideration for a particular appraisal assignment

• Third, the creditor and its agents must not engage in any anticompetitive acts in violation of federal or state law. Examples of prohibited acts include: (i) entering into contracts or engaging in conspiracies to restrain trade through price fixing or market allocation, in violation of federal or state antitrust laws, or (ii) engaging in acts of monopolization, such as restricting entrants into the relevant geographic markets (e.g., if an AMC holds a dominant position in a particular geographic market, through that AMC’s use of exclusivity agreements in its contracts with creditors) or causing persons to leave those markets, in violation of federal or state antitrust laws

Second Presumption of Compliance. A creditor and its agents are presumed to be in compliance with the customary and reasonable compensation requirement if they determine the amount of compensation paid to the fee appraiser by relying on rate information that meets all of the following:

• First, the information must be based on objective third-party information. This includes fee schedules, studies, and surveys prepared by independent third parties, such as government agencies, academic institutions, and private research firms
• Second, the information must be based on recent rates paid to a representative sample of providers of appraisal services in the geographic market of the property being appraised, or the fee schedules of those providers. (See discussion above regarding the “geographic market.”) Thus, the fact that the information is derived from a government agency fee schedule is not, by itself, sufficient to get the benefits of the second presumption of compliance—it also is necessary to confirm that the information is based on recent rates actually paid to a representative sample of providers in the relevant market, or the fee schedules for those providers
• Third, any information based on fee schedules, studies, and surveys must exclude compensation paid to fee appraisers for appraisals ordered by AMCs. For this purpose, an “AMC” is defined as set forth above. As noted above, this definition is the same as the definition of an “AMC” under Section 1124 of FIRREA, except that it does not require the person to oversee a network or panel of a certain minimum size

This is only a SMALL portion of the complete document - Download 101101-Interim-Final-Rule-on-Real-Estate-Appraisals[1]

More information from Morrison/Foerster can be found here: Download Dodd-Frank Residential Mortgage Guide

FRB Rethinking "Final Interim Rules"? - Consumer Financial Protection Bureau (CFPB) Established

GUEST AUTHOR: Dave Towne, Certified Real Estate Appraiser - Towne Appraisals.  16422 Britt Rd., Mount Vernon, WA  Phone: 360.708.1196   eMail: towneappraisals@clearwire.net  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!

 

 Mail your letter to the FRB today!

GUEST AUTHOR: Dave TowneTowne Appraisals Mount Vernon, WA 360-708-1196 & Appraiser Education Service