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Comment on Financial Reform Implementation
September 11, 2010
I’m a Certified Residential Real Estate Appraiser with 9.5 years experience. Please see that the Bureau considers these suggestions in the writing of the new Interim Final Regulations for the Dodd-Frank Law:
Appraiser Independence -
The above should also apply to any entity who acts as an appraiser management or assignment placement service on behalf of any lender.
AMC issues -
There is a pervasive tendency for AMC’s to only provide assignments to the lowest fee appraisers, and require very short report completion turn times. Both of these aspects compromise the integrity of the appraisal process in that minimal quality reports are being done at a time when we need well documented appraisal reports. Cheap and Fast cannot be tolerated as acceptable appraisal policy. Many appraisers are cutting corners in their reports as a result of lender and AMC low fee and speed requirements. This has the tendency to devalue the appraisal process which should be done by experienced and competent appraisers who produce quality reports.
The Interim Final Regulations should address adequate report completion time, determined by the appraiser.
C&R Fees -
Nowhere in the law does it state that Customary and Reasonable fees charged by appraisers have to be delayed for 90 days. The 90 day window applies to appraiser independence regulations only. Appraisers have always been able to charge appropriate fees for their service. Those fees are well known among appraisers in every geographic region in the US. Most local lenders and even national banks are aware of what most appraisers charge for non-complex property appraisal assignments.
Only with the extraordinary increase in AMC’s has this become a major issue. The AMC’s have been given the C&R fee the lender would normally pay directly to the appraiser, but the AMC’s have stripped out egregious amounts before the appraiser is compensated. AMC’s are third-party providers to the lenders, and thus are covered under the RESPA law which prevents siphoning of appraiser fees to pay appraisal ordering overhead expenses.
Despite the distortions of these facts by TAVMA, a trade organization representing AMC’s, there is an existing national independent fee survey available to anyone for FREE, and VA also has their own fee tables for different states. Other independent surveys are being promoted by several other entities involved with appraisers, but these do not presently have the validity the other independent fee survey and VA fee tables demonstrate.
Appraisers around the country are attempting to comply with the Dodd-Frank law by raising their fees back up to what would normally be Customary and Reasonable. But appraiser’s primary clients, in the case of AMC’s, are resisting this effort and in many cases are beginning to blacklist appraisers who attempt to be fairly paid.
A governmental agency or AMC should not determine what appraisers should be paid; that’s the appraiser’s responsibility based on the appraiser’s own circumstances and property characteristics.
The Interim Final Regulations should mandate that the appraiser establish Customary and Reasonable Fees for various appraisal services, and those fees should be honored by the AMC’s.
The Regulations should also state that the lender must compensate the AMC for their services, not the appraiser who is hired to complete the appraisal assignment.
|Last Updated 9/23/2010||FinReformComments@fdic.gov|