MBREA Meeting with Congressman Frank RE C&R Fees
Update on MBREA Meeting with Congressman Frank Regarding Customary & Reasonable Fees
One of our readers forwarded MBREA’s email following up on the meeting with Congressman Barney Frank about Customary & Reasonable Fees.
“We recently reported about a meeting MBREA had with Congressman Barney Frank. Congressman Frank is aware of the appraisal professions concerns about customary and reasonable fees and has been working with the Federal Reserve on its interpretation of the statute.
Congressman Frank wrote in a followup letter to MBREA Government Affairs Committee Chair, Allan Cohen, “…I am especially sensitive to any misinterpretation of legislation we enacted because I do not want in any way to be responsible for any harm coming to an important economic activity [appraising] such as yours.” He went on to say, “…I am already one hundred percent convinced of the accuracy of the complaints and have already been working on them.”
Today, we enjoyed a lengthy conversation with one of Congressman Frank’s staff. We discussed the need to establish a complaint hotline for use by appraisers as well as a need for the Federal Reserve to instruct banks about the requirement that fees be both customary and reasonable.
We would like to present Congressman Frank with concrete examples that show lenders and AMCs are unwilling to agree to your request for a fee increase due to the complexity of the assignment or expanded scope of work.
We do not need examples of assignment orders you receive offering fees you consider too low to begin with.
While we would like to receive written documentation between you and the AMC. We will also pass along a well documented history of such an exchange. These examples should show you are requesting a higher fee due to complexity of scope of work, and the rejection of your request by the AMC.
Please send these to steve@mbrea.org.”
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Good effort Steve. It is appreciated. I hope Congressman Frank is able to do something. HVCC has destroyed our industry. It’s not just the fees. It is also the gap in communication and information gathering that exists now. In ‘the old days’, contrary to the inferences of HVCC, it was very helpful to communicate with the bank to understand the intended use of the report, and where a sale transaction existed, to insure proper follow up in getting copies of the contract so that they could be analyzed to determine if non market incentives or concessions were present. It also helped to disclose variances in public records and what the owners knew (“It was a two bedroom when I bought it, but we added 1,200/sf for two more bedrooms and two more baths, with permits). Like so many things, the efforts at micro management created lower quality across the board, rather than fixing problems. Now, lenders get ONLY the bottom of the barrel appraisers, OR appraisers very upset over being forced to work so cheaply in order to feed their families. Almost zero ‘extra effort’ takes place today. FIRREA had all the protections ended. The only problem is that it was never fully followed.
Anyway, your efforts, and those of the Congressman are sincerely appreciated. I’d recommend the Congressman replace wording after reasonable and customary to the effect that FIRREA must be followed, AND no AMC shall be involved UNLESS the actual order is placed by an appraiser in the state it is being ordered in.