AMC Fined for Reasonable and Customary Fees Violation
The Louisiana Real Estate Appraisers Board Holds the First Hearing for AMC’s Not Following the Laws and Rules for Determining Minimum Reasonable and Customary Fees
As a result of a thorough investigation conducted by The Louisiana Real Estate Appraisers Board (LREAB), an adjudication hearing for an appraisal management company was held to determine if that firm is following the laws and rules pursuant to minimum reasonable and customary fees, as required by the Dodd/Frank Act and Louisiana laws and Appraisers Board rules. The case alleges the appraisal management company Coester VMS was not compliant with the state’s AMC laws and rules, which require an AMC to compensate appraisers at a rate that is reasonable and customary for the appraisal service being performed within the market area of the property being appraised.
The LREAB alleged that Coester VMS Appraisal Management Group did not use one of the two stipulated methods to establish minimum reasonable and customary fees. These two methods are fees set by an objective third party or the factors set forth in Section 31101 of the Rules and Regulations of the LAREAB. Coester VMS stipulated to the violations, as charged, and agreed to:
- Follow the current Louisiana Fee Survey beginning 30 days after the effective date of the agreement.
- Submit a quarterly report to the Board for a period of 12 months that will list all appraisal orders made in Louisiana, the fee paid the appraiser for each report, and the date payment was made to the appraiser. Such reporting will begin 60 days after the end of 2Q 2015 end date. Such reports will be kept confidential by the board.
- Pay a fine of $5,000
- Be monitored for the next 12 months
- Waive all rights to contest/appeal this case
This agreement to accept charges brought by an AMC regulatory authority is a seminal event that signals violators of law or rules that they will be held accountable for their actions.
This agreement is a step in the right direction toward a goal of transparency for consumers, appraisers, and financial institutions. The Louisiana Real Estate Appraisers Coalition hopes that this will advance transparency for the appraisal industry in the future. Appraisers are reminded to report any violations of the current AMC laws and rules to the Louisiana State Appraisers Board to ensure the law is adhered to fairly across the board for everyone.