REVAA and FAIR Approach for Appraisal Fees
REVAA and FAIR Call for Market-Driven Approach for Appraisal Fees
Washington, DC (PRWEB) July 14, 2011, Donald Kelly, executive director, Real Estate Valuation Advocacy Association (REVAA), appeared today before the House Financial Services Committee, Subcommittee on Insurance, Housing, and Community Opportunity to testify on behalf of REVAA and the Coalition to Facilitate Appraisal Integrity Reform (FAIR) on Mortgage Origination: The Impact of Recent Changes on Homeowners and Businesses.
The testimony comes just prior to the Federal Reserve Board transitioning its rulemaking authority to the Consumer Financial Protection Bureau (CFPB). Members of REVAA and FAIR advocate that the Federal Reserve Board, the CFPB, and Congress should continue to allow the marketplace to dictate appropriate appraisal fees.
“In the lead up the current financial crisis, inflated appraisal fees were the norm for many appraisers who, in partnership with overzealous mortgage brokers and lenders, produced appraisal reports that were impacted by inappropriate influence and coercion,” states Mr. Kelly in his testimony. “The resulting appraisals often reflected inflated values, which certainly did not constitute ‘high quality’ appraisals.”
Kelly cites the Dodd-Frank Act requiring that lenders and their agents compensate appraisers at a “customary and reasonable” rate for appraisal services in the market area of the property being appraised. REVAA and FAIR believe that the appraiser compensation standards promulgated by the Federal Reserve Board are in compliance with the Dodd-Frank Act and they reflect the variations in actual services and other factors that exist in the marketplace.
“Appraisal services are not one-size-fits-all, and we believe the Federal Reserve Board created a compliance structure for the payment of ‘customary and reasonable’ appraisal fees that reflects market realities and ensures that prices paid by consumers will remain competitive,” states Mr. Kelly.
A copy of the transcript is available here.
About FAIR
FAIR is a coalition of five of the nation’s largest appraisal management companies, which operate networks of individual appraisers and appraisal firms for the completion of appraisal reports. The five companies that comprise FAIR include: LSI, a division of Lender Processing Services, Inc.; ServiceLink Valuation Solutions, LLC, a Fidelity National Financial, Inc. company; Valuation Information Technology, LLC d/b/a Rels Valuation; CoreLogic, Inc.; and PCV/Murcor. Rels Valuation is an affiliate of CoreLogic, Inc. and Wells Fargo Bank.
About REVAA
The Real Estate Valuation Advocacy Association (REVAA) is an industry trade association dedicated to the maintenance and further development of high quality standards within the real estate valuation industry and the advocacy of related causes. REVAA promotes high ethical standards, political awareness, and the growth of the real estate valuation industry as a whole. REVAA is comprised of companies that produce and sell, or benefit from, real estate valuation products including Appraisals, Broker Price Opinions (BPOs), Automated Valuation Models (AVMs) and other innovative approaches that benefit mortgage investors, servicers, originators and borrowers. Learn more at http://www.revaa.org.
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If so many EXPERIENCED APPRAISERS had not been driven into new careers or into bankruptcy Mr. Don Kelly’s comments would be laughable. As it stands however I would say they are merely BOLD FACED lies.
For those of you who do not know, Mr. Kelly has recently assumed the position of Antichrist to residential appraisers. Whereas Jeff Schurman once held this position (with TAVMA), Mr. Kelly now hold it with REVAA. You must love this guys quote: “inflated appraisal fees were the norm for many appraisers”. Are we talking about reality here or the current fantasy world that Don lives in. AMCs have clearly boosted appraisal fees to homeowners by 50% since 2009. Don is the only human on the planet who denies that fact. Is cutting the appraisers fee by 50% and expecting better quality realistic to anyone with an IQ over 20?
My SUGGESTION
Give Don Kelly a 50% paycut and demand that he do twice the work that he normally does. Pile the weight of overhead for a small business on his shoulders for that period of time as well. I suspect that after 12 months have passed he will indeed see the light just as Jeff Schurman did this year. Remember the recently released White Paper from Jeff Schurman stating the numerous reasons why appraisers should be paid fair fees?
Appraisers get it Don
Jeff Schurman finally gets it
1 member of the national media gets it (Ken Harney/Washington Post)
When will Congress get it?
When will the rest of the media get it?
When will homeowners get it?
BankRape.com
DITTO on what Retired Appraiser said.
It appears to me that Mr. Kelly is on the side of the AMCs.
Any other profession in which a service is performed, you are handed a bill for services rendered. In this industry, we are told what we are going to get paid for our services, which is minimal at best. I am so distrought over my situation, I have contemplated suicide …….
I am convinced that the trick succeeding as an appraiser today is leaving the business completely. It’s tough to do if you love it as much as I did (and apparently you do) but necessary. I spent 18 years building my appraisal firm and was only midway through my career when I walked away. After working with AMCs like PCV Murcor and Appraiser Loft I knew there was no way in I would attempt to make a living as an appraiser slave.
When you can’t adjust the wind, adjust your sail. It’s really that simple. If adjusting your sail means taking bankruptcy, don’t fear it. You can keep your home & your car in many situations. After spending 3 years of working with mentors for beans and running up my credit cards I took bankruptcy before starting my own company. I recommend it for appraisers who are stressed to the eyelids. It’s painless and to be completely frank with you; everyone is doing it.
NC Appraiser – don’t kill yourself. You have valuable and marketable skills. You just need to market them to other people. I am shifting my business model away from lending institutions (with exception of local banks who do not sell their paper to govt-controlled entities) toward realtors & attorneys and their clients, as well as individual investors. In other words seek work from people who value your service. I will not work for someone who puts a pimple-faced kid who’s never even purchased a home in supervisory position over me! Screw the AMCs!
Appraisers typically were not compensated over any normal billing rates for the industry, when or if they ‘partnered up’ with over zealous mortgage brokers. Rather the appraiser who made deals work more often were given the majority of appraisal orders, since the lenders in house policies regarding equalized non biased appraisal distribution were lacking. The argument presented here regarding inflated fee rates is a misdirection and excuse to slash the appraisers fees and take such fee as amc profit. Today, like prior to HVCC, lender policy typically directs the standard total appraisal fee, usually with clearly defined fee caps each lender has in written for in house. The only difference then and now is that the amc who is now in control of the consumer charged appraisal fee amount utilizes that position to draw up the consumer charge, and push down the appraiser charge for additional profit. Appraisers in the past typically billed as much as the lender would allow, and most panel appraisers had a uniform billing rate, lender to lender. Now appraisers fees are highly varied, and inappropriately so. The appraiser who has the lowest fee is the appraiser who gets the most amc orders. This is because by providing a discount to the amc, the appraiser is enticing them to send more orders via a thing of value. I fail to see the difference in the then and now engagements, if the topic is thing of value compensations to be the preferred appraiser. Yesterday it was profit to the broker, today it’s amc profit. Yes men get all the appraisal orders.
If Mr. Kelly’s statment is factual:
“In the lead up the current financial crisis, inflated appraisal fees were the norm for many appraisers who, in partnership with overzealous mortgage brokers and lenders, produced appraisal reports that were impacted by inappropriate influence and coercion,” states Mr. Kelly in his testimony. “The resulting appraisals often reflected inflated values, which certainly did not constitute ‘high quality’ appraisals.”
Then there is no need for furthur laws, or processes, or discussion. Simply arrest the perpertators he so clearly is aware of and put them in jail. Problem solved. Then the remaining licensed professional appraisere will be at liberty and have the freedom to compete based on price, quality, and service, and the consumer will win.
Protection at the cost of freedon is no protection.
This proponent for AMC’s justification for our low fees is a sickening twist of the truth. Sadly enough the AMC lobby is pumping up the coiffures of all the politicians. We once again get THE SHAFT, when are appraisers going to wake up and allow a large organized UNION to stop all these people from screwing us out of a fair wage & fair treatment ? Most citizens are appalled when explained how much work a typical appraisal requires these days & how poorly we are treated by AMC’s & lenders.
With appraisal fee’s just now getting back to what they were 18 years ago, I like many other appraisers are trying to survive until we can replace the income of servitude we now share. I have lost everything due to refusing to cut fee’s and am looking to relocate when I can find another job ( this is no longer a career, as we have become unrecognized employee’s). There is no way we can meet USPAP and State guidlines with a 48 clock hour turn time. Appraisers are some of the dumbest business people I have ever met, cutting fee’s means cutting corners and throwing USPAP out the window with your quality of life.
I have been appraising for 15 years. I can show you invoices from 1999 and my standard fee has not changed more than $50 that time. With overall inflation and considering we do about twice the work we did then, we make less! And due to the Real Estate Market collapse, which was not caused by a few bad egg appraisers, there isnt as much work to go around. Luckily I don’t depend on AMC’s for business. I have a select few that pay reasonable fees and I treat them with the same turn times as anyone else. As for the fact they can provide appraisers with work……I can and have been able to forge my own realtionships and can get my own work so they can argue that all day. I somehow managed to survive before the AMC’s! I won’t do the same work for half the pay……
How is it not a complete conflict of interest that the big banks own the AMCs?
Let’s follow the money trail from-and-to the REVAA that’ll tell the story.
Vote Republican in Nov.
That won’t help man. Our only hope was Ron Paul, and still is. Write him in!
I just want to make the same per hour as the AMC’s do. They charge about $150 for about an hour worth of work.
A conservative estimate of my time spent on an appraisal is +/-6 hours. How does $900 sound per appraisal.
This industry, like so many others have now become total puppets of money managers by law. Before, we had a choice to find good Banks etc. to work for that did not try to tell you what a property was worth before seeing (which I never took btw), but now they have figured out a way to make $ off your prior fees by creating AMC’s and taking 1/3 or more. It is all such a joke, but the real game is to figure out how to get on as many panels as possible, ask for higher fees once established, and turn down work when they won’t pay you what your time is worth. I was approved for a $800 fee today for a high end 6200sf home, but then got rid of it because I am too busy with other work to waste that much time on one report. Get smart fellow appraisers. These liars will continue to work us, so get out if you can, or find a way to work them back. They are the bankers after all! BTW, I charge $400 for a standard 1004 and receive even more than that quite frequently, and the least I take is $375. You can do it too! Don’t give up!
My business has tripled under the AMC system. The most efficient appraisers survive. The slow ones with the old tape measure and desktop from 5 years ago do not.
Wow! To see so many names from 2015 posting back here! RA, Baggins, all the others. You MAY be surprised to see issues you were engaged in back in 2012 with solutions starting to come to fruition. RA, my friend -I know, you disagree *g*.
I came to this link as a result of one who read my proposed fees post from September, 2015. References to Don Kelly, TAVMA, etc. What I did NOT know was the influence of RELS, LSI and PCV MURCOR in this!
God BLESS you guys for posting this stuff back in 2012 and for Brad S. pointing me in this direction in 2015!
I was a rabid blog poster on the injustice and illegality of appraiser rape as far back as 2009. I’ve outlived at least six major appraisal blogs including http://www.appraisalscoop.com (once the greatest of them all.
As long as my fingers to continue to function I will continue to badger appraisers about doing something to help themselves.
RA, it was one of your fellow old time activists that lead me around to this particular blog.
There is a LOT that you guys did collectively, that could be used now. For example, I’d never have had a reason to search “FOIA Federal Reserve or BGS” but when a poster told me to look up his history (BGS), the FOIA link turned up as well and a host of OTHER critical information popped up.
In 2009 I pulled the plug and went to go work for the feds. As a new hire I was extremely non controversial in any public opinions and blogging. Frankly I was largely “Absent” until after 2011 when I had to rebuild my own appraisal business. You, and guys like Brad S. could be an extreme wealth of information and help.
In just one day of posting you’d be amazed at how much opposition there is to promoting a minimum fixed fee. A lot of support too, but more push back than anticipated – at least on that other blog. Some is philosophically based; some legit concerns and others have competing self serving interests I suspect.
Frankly having some of the support from this blog on the other blog would be helpful.(Wayne McKerley’s Appraisers Forum.com blog-not sure why that name rings a bell, but it does for some reason I cant recall right now). Its nagging me. If someone knows anything about him, please share.