Full Transparency in Fee Disclosure

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VaCAP Board

Coalition of Appraisers in Virginia at Virginia Coalition of Appraiser Professionals
Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.
VaCAP Board

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Bill Requires AMC to Disclose their Fee and Fee Paid to the Appraiser

Requirement to disclose appraisal fees: Uniform Settlement Statement SHALL include the AMC fee AND fee paid directly paid to the appraiser by the AMC…

HB 3619 has been referred to the House Financial Services Committee. VaCAP has learned over the weekend that HB 3619 has been introduced in the US House of Representatives. HB 3619, short titled “Appraisal Reform Act of 2019” amends the Financial Institutions Reform, Recovery and Enforcement Act. The main change to  FIRREA deals with appraisal management company and appraiser trainee registries and the addition of a member of the Veterans Affairs on the Appraisal Subcommittee.

The bill also modifies Section 2603, the Uniform Settlement Statement, by changing one simple word from “may” to “shall”. This bill requires appraisal management companies to disclose their fee on the settlement statement, as well as the fee they paid to the appraiser. Full transparency!

Will this impact appraisers? Not at first, but in time, consumers will notice this third party fee and questions will be asked. Lenders will have to explain. Could this be the beginning of the end of AMCs? See the bill below.
 

SEC. 5. REQUIREMENT TO DISCLOSE APPRAISAL FEES.
Section 4(c) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2603(c)) is amended by striking “may” and inserting “shall”.

12 U.S.C 2603 (c) Disclosure of fees
The standard form described in subsection (a) may include, in the case of an appraisal coordinated by an appraisal management company (as such term is defined in section 3350(11) of this title), a clear disclosure of—
(1) the fee paid directly to the appraiser by such company; and
(2) the administration fee charged by such company.

Please take moment and contact the US House Financial Services Committee and express your support for HB 3619.

Committee Address and E-mail
U.S. House Committee on Financial Services Democrats
2129 Rayburn House Office Building
Washington, DC 20515
Phone: (202) 225-4247
Fax: (202) 225-6952

Email: FSCDems@mail.house.gov

The Virginia Real Estate Appraisal Board Quarterly Meeting will be held on July 30th @ 10:00 AM

Department of Professional & Occupational Regulation
9960 Mayland Drive
Suite 200
Richmond, Virginia 23233

This meeting will be of particular interest as the Proposed Hybrid Appraisal Guidance Document will be discussed and voted on. In case you did not get a chance to view all the public comments that were posted on Town Hall, there were 153 comments posted, with all but a handful cited public trust concerns with these products. The comments can be viewed here.

See the meeting on Town Hall
 

Image credit flickr - Bryan Alexander
VaCAP Board

VaCAP Board

Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.

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12 Responses

  1. Retired Appraiser Retired Appraiser says:

    Could it be that crime stoppers solved the crime ten years after it was committed? Not a chance.

    This bill will be defeated lickity split.

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  2. Avatar marion says:

    The fee split disclosure (c) is in the portion of the law that deals with the CLOSING statements, after the fees have been paid, not the upfront disclosures.

    6
    • Avatar Advocate says:

      Ah yes, but the initial disclosures are suppose to be match the settlement statement.- You know the argument AMC’s use stating the fees can not change or they have to redisclosure to the borrower. . I am sure if a loop hole exists, the amcs will find a way to exploit it.

      7
  3. Robin Lowery on Facebook Robin Lowery on Facebook says:

    That and complete transparency of the clients interest owned in the AMC.

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  4. In anticipation, I urge all appraisers to include words similar to the following either in the cover FIRREA compliance addendums OR as the first line in the text addendum:

    “The appraiser’s fee is $xxx.xx. The total fees paid by the borrower for purported appraisal purposes is undisclosed to the appraiser. As of the date of this report, fees paid in advance by the borrower for the appraisal (have or) have not yet been paid to the appraiser.”

    4
    • Avatar Jack Of All Trades says:

      Illinois has appraisers put the fee on the addendum but that has not helped, it gets buried or borrowers just don’t care enough

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  5. Jack, it all starts with a small pebble dropped in the pond of public knowledge. It takes a while for the ripples to be noticed. It’s a start. There are no magic bullet, single-action solutions.

    4
  6. Leanne Kerber on Facebook Leanne Kerber on Facebook says:

    Both the appraiser fee and the AMC fee should be included in each appraisal report and on closing documents for full tranparency… Should have been that way all along.

    2

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Full Transparency in Fee Disclosure

by VaCAP Board time to read: 2 min