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!
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