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Comment on Financial Reform Implementation

November 17, 2010

Having been in the industry over 23 years and running my own appraisal company for 11 years I have seen a good share of the “Customary & Reasonable Fees in my market.

My income has been declining over the past 2-3 years and my work load has increased 30%, why the large lending institutions have created monopolies that we call “Appraisal Management” companies (AMC’S).

They are charging the consumer more and the consumer seems to be getting less. The AMC’s are taking in huge profits by paying or offering to pay 20-30% off of what the C & R fee would have been if they did not exist.

$ 300. Was C & R in my market for nearly 10 years, you could pick up the phone and call 10 appraisers and 8-10 of them would quote $ 300. Today there are AMC’s offering $ 200-250. For the same report and charging the consumer $ 400. Ask them what they provide for there $ 200.+/- fee and they really can’t provide a concrete answer or reason why they are needed in the first place.

They are putting long time appraisers out of business and feeding assignments to green appraisers with much less experience who are happy to be WORKING at all.

The VA fees are a great starting place for Customary & Reasonable, to become a member of the Fee panel you need a minimum of 5 years full time experience, a background check and an unblemished appraisal history. Is that the type of appraiser you would want in your home?, of course.

I don’t mind the existence of the AMC monopolies, but I have to draw the line when the are lying to the consumer and telling them, the appraisal will cost $ 450. When a well qualified appraiser would accept $ 350. The HUD-1 speaks for itself, one line item, “Appraisal Fee”, it is very misleading and costly to the public.      
  
Thank You For Your Time,

Fritz Vogel CREA,CRS,CEI,GRI
NYS Certified Residential Appraiser
NYS Licensed Real Estate Broker
FHA-HUD-VA-USDA-ERC Trained and Approved

 

 

 


Last Updated 11/19/2010 FinReformComments@fdic.gov