Appraisal Fee Transparency Bill Falls Short
WorkingRE published news of recent House of Representatives action. The Bill addresses consumer disclosure of AMC fees among other issues.
While the American Guild of Appraisers applauds the efforts of those that worked in good faith on this, it still falls very short of what is most sought (& required) by appraisers
“Reasonable Fees,” related to the specific properties’ individual appraisal complexities. We do concur with Mr. Turner’s concluded action recommendations at the end of the article; with the following additions.
We need to do much better than “half a loaf” in our appraisal legislative efforts. Especially when that half loaf does no more than enshrine continued price-fixing by lenders; with the support and blessing of REVAA.
No system that continues to incorporate appraisal fee price-fixing by lenders or their correspondent ‘loan officers’ & AMCs can be considered acceptable.
No system that continues to allow (or limit) defining appraisal complexity to the lender or AMC will ever achieve reasonable, or fair compensation for the appraiser.
I no longer use the secondary Dodd-Frank descriptor of ‘customary’ fees because REVAA & their affiliates have bastardized that term and concept so badly it has become meaningless.
Originally advertised by the now thoroughly discredited & defunct Coester VMS – “National One Size Fits All” AMC/Appraisal fees were promoted. That and ‘lowest fee possible’ are the sole metrics on which all AMC marketing is (apparently) now based. Complex appraisals that by law require completion by Certified level Appraisers are routinely assigned to lower License Level appraisers. Appraisers that lack the skill, experience and license level (State Certification) to legally perform them.
Lenders were & still are offered a single fee for AMC service that includes any appraisal fee, regardless of complexity. This was well before the property was screened or analyzed for complexity, or even reviewed by an appraiser to determine complexity; fee adequacy and completion time needs.
Any effective or meaningful regulations must also incorporate specific procedures in which the TRID disclosed appraisal fee is not ‘locked in’ until AFTER the appraiser tentatively assigned to do the job has screened the property to determine its required license/certification level complexity and fee adequacy.
H.R. 3619 needs to be amended by the various House Committees & in any Senate versions before final adoption and passage into law.
Consumer protection also requires honest assurance and disclosure that the person performing the work is qualified by experience and license level to be doing the work. Adequate compensation relative to the complexity is also required so that credible, & proper analyses are made.
We urge all who have worked to get the Bill adopted to this point, to continue their work to resolve the deficiencies identified above.
Reasonable fee ‘tests’ must minimally be at levels not lower than the Regional VA fees charged for similar property types. Even then, additional metrics should be considered addressing specific assignment complexity with higher fees as warranted.
Anything less, continues to result in consumer fraud.
We suggest the following, or similar derivative. It’s generally based on federal civil service guidelines for appraisers. (sample dated 2015 should be updated for COLA/Inflation)