CFPB Crackdown: Unfair Practices Hurting Consumers
As we all know many AMCs are not paying Customary & Reasonable fee as required by TILA. They have consistently pushed down the pay of Appraisers while making undisclosed profit off consumers and prioritizing cheapest and fastest over quality and competency. The CFPB has been in communication with individuals behind the scenes and are concerned with what has been shown enough to include AMCs in their data collection process.
Now is the time to send them everything we have. To drive legitimate change, we must encourage as many appraisers as possible to submit all relevant information to the contact details provided below.
[Docket No. CFPB-2024-0021]
Request for Information Regarding Fees Imposed in Residential Mortgage TransactionsAGENCY: Consumer Financial Protection Bureau.
ACTION: Request for information.
SUMMARY: The Consumer Financial Protection Bureau (Bureau or CFPB) is seeking comments from the public related to fees charged by providers of mortgages and related settlement services.
DATES: Comments must be received on or before August 2, 2024.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2024-0021, by any of the following methods:
- Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
- Email: 2024-RFI-ResidentialMortgageFees@CFPB.gov. Include Docket No. CFPB-2024-0021 in the subject line of the message.
- Mail / Hand Delivery / Courier: Comment Intake —Residential Mortgage Fees Assessment, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.
Instructions: The Bureau encourages the early submission of comments. All submissions should include document title and docket number. Please note the number of the topic on which you are commenting at the top of each response (you do not need to address all topics). Because paper mail in the Washington, DC area and at the Bureau is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to https://www.regulations.gov.
All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Proprietary information or sensitive personal information, such as account numbers or Social Security numbers, or names of other individuals, should not be included. Comments will not be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory Implementation & Guidance Program Analyst, Office of Regulations, at (202) 435-7700 or https://reginquiries.consumerfinance.gov/. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@cfpb.gov.
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- Background
People rely on mortgage loans to buy their homes, tap home equity at key life moments, and refinance those loans when interest rates decline. Mortgages come with many associated fees and costs, referred to as “closing costs,” that are due by the time the loan closes or when the borrower signs the loan agreement. These closing costs, and particularly the costs the lender imposes on the borrower as part of the cost of getting the loan, have recently risen sharply.1 From 2021 to 2023, median total loan costs increased by over 36% percent on home purchase loans. The median dollar amount paid by borrowers in 2022 was nearly $6,000 in these costs and fees. This, along with increased home prices and interest rates, have placed increased pressure on borrowers’ budgets, contributing to a lack of access to credit and decreased home affordability…
Appraisal fees and related valuation fees, including payments to appraisal management companies, also contribute to the total loan costs. Many of the fees are charged to cover the lenders’ costs associated with closing a loan…
Well done! This is long over due. Thank you for the hard work from all involved.
https://www.federalregister.gov/documents/2015/06/09/2015-12719/minimum-requirements-for-appraisal-management-companies
Count the violations? CFPB should audit the entire amc industry and lenders whom use them.
AMCs have been pocketing $100s of Millions without disclosure off the backs of Independent Appraiser since 2009. This practice has robbed our industry of time and resources for over a decade. I’m tired and broke, but still fighting for our career. Thanks Josh
When asked my fee and turn time I have put the past 5 with 2 day turn time and my standard fee. Clearly I received none because they want the lowest fees out there. One appraiser was $100 less and 75 miles away. Saw that horrible report, but that was the lowest fee and the appraiser did not know this area at all. I am sure this can be proved all over the USA
I have said it before and I will say it again and again and again….. Report “Quality” complaints are ONLY made when the value does not come in at contract or “as expected”. So as long as your 75 mile away cost cutter comes into value, there is no quality control issue or complaint. Subsequently, how does one prove that the lowest bid was the worst appraisal if the appraisal gets no complaints….. Bias exists in our profession and it always has, but the color of bias is green, the kind of green that represents the avoidance of being accused of bias or avoid having to respond to an ROV or lose business because one does not make things work.
One of the appraisal distribution platforms changed my email to an unmonitored internal email of their own without telling me, nullifying any new random invite requests and solicitation efforts for new clients, because I complained about too many amc bid request emails. I’m probably not the only appraiser this has happened to.
They also may secretly invalidate any appraiser whom clicks amc mail to spam, without actually changing the appraisers email, in order to protect their email sending systems from being blocked by email receiving systems. Clients think they’re emailing the appraiser, but the appraiser never gets the email. The lender clicks the appraiser off the approved list for being non responsive.
See how this works yet? TILA and C&R violations are not even half of the problem. If appraisers try to work only with lenders and not amc’s, we get penalized by the tech companies, covertly black listed. The tech companies want appraisers to work for amc’s, because then they bill for the order handling fee twice. Once for the lender to the amc, then again for the amc to the appraiser. TILA C&R violations are just the tip of the ice berg. Too long to list all the damages and harms caused by amc’s, but we have written extensively about that on this blog for the last 15 or so years, however long it’s been.
I’ve been appraising for 40 years. I’ve noticed that every time “things are going to get better”, they don’t. We get paid less for more work and more grief. I mean, you made $50 more than usual on this appraisal, so please do $1,000 more work for us! The AMC’s are rich and make political donations. We don’t have a chance against that unless we can come up with $billions to donate to politicians. It’s always do more for less, drive farther for less, work longer for less, put up with more irrelevant questions for less, don’t say “church” for less, why can’t you do that appraisal that’s 100 miles away where you have to drive 300 miles taking comp photos for the same price as the appraisal next door, etc., ad nauseum. Remember, SJW’s and DEi’ers, oops, I mean, appraisers, you don’t count!
My appraiser friend told me a prominent legal client dropped him because he asked for a higher fee to be an expert witness on a value dispute regarding several million dollar homes. Lawyer told him it’s just a few hours on a zoom call, and limited the fee to less than a hundred dollars, after they talked him into doing multiple appraisals on those same homes for less than a mortgage lender would pay for a single condo appraisal. He thought he’d make it up on the back end with expert testimony fees. No cigar. He’s probably going to get a subpoena to appear in court for free instead. And that’s why I don’t work with lawyers either.
If you want your blood to boil, read the public submission sent by Benjamin Nelson. Here is just a taste: “Thus, we continue to have existing appraisers that are using several reasons to justify their price increases because there is
limited competition in their industry. The (sic) are, in effect, a small pool of appraisals with
cartel-like powers to increase prices due to limited competition.”
Appraisers should flood the CFPB with public comments to silence these types of ignorant and uninformed comments.
Can you provide a link to these “submissions”?
Follow the link in the article
The link posted by Baggins does not allow public comments to be created or read ?
Here is the link to comment:
https://www.regulations.gov/commenton/CFPB-2024-0021-0001
And here is the link to read the comments:
https://www.regulations.gov/search?filter=docket%20no.%20cfpb-2024-0021
Thank you !!
What I had posted at the top was the 2015 final rule for minimum standards for appraisal management companies.
Will make an anonymous comment soon, although from the 21 so far, many of the important points are covered.
Phone a friend, send the link to your email list. Drum up more comments.
Thank you.
Yep – Ol Ben is pretty ignorant about the appraisal “business model”. Cartel-like AMC’s maybe ??
only 8 comments so far – hello – there should be more like 10k just from appraisers – come on people – let it all out and not just on a blog – then post them back on here – take some time out to do it – comment period ends – only 53 days left
Up to only 30 comments now. Either very few people care or they like the amc system the way it is. Back when Biggers rallied for C&R, he hand delivered thousands of appraisers letters directly to congress. Please, send letters asking your co workers, realty agents, lenders, or even family members to comment. Write a letter to your local state appraisal groups asking them to comment, as more than three out of four appraisers no longer work with amc’s, they may not be actively paying attention to these issues, please help them be aware. If you’re retired or moved on, write a letter anyways, detailing how amc’s played a part in those decisions and how they effected your appraisal business. Comment deadline date is Aug 2nd. I’m reading them but will comment soon.
https://www.regulations.gov/document/CFPB-2024-0021-0001
C’mon kids – time to login and rant to the Gubment while you can. I did
I wouldn’t be surprised if the government is censoring comments that do not fit the narrative they are trying to spin about the “cartel-like monopolies” that are the appraisers and FICO and the credit bureaus. I submitted a comment, but it did not appear on the list. Maybe they are filtering through the comments and that is why there are only 30 comments that have been posted.
Thank you for providing a comment. Edited post. Looks like the comment showed up. What else can you do except tell the truth.
What the amc people do not understand is although they are excited about their company and business model, appraisers are fatigued and subsequently reject the model. They’re all the same; Appraisers have to bid for every single order or there is no work. There is no steady rythm of available work unless the appraiser capitulates to every single demand and service performance standard. Being an employee, without any employee benefits. If the amc industry can’t figure out what a fair fee is by now, how to demonstrate the minimal levels of operational efficiency and send one appraisal request to one appraiser instead of a hundred, and do so with consistent rates and a consistent rythm, we can’t help them. Most of us are not interested in being graded by people whom are not qualified to perform the task, or gaining unfair leverage over our peer appraisers by climbing to their top tier top rank programs to capture the majority work share. If appraisers are qualified to be on the panel, they should all get a fair share of work for a reasonably consistent fee amount.
https://downloads.regulations.gov/CFPB-2024-0021-0040/attachment_1.pdf
Updated CFPB letter from appraisal groups on amc junk fees.
Please write your letter today.
https://www.regulations.gov/document/CFPB-2024-0021-0001
Four days left to comment. Just copy mine if you have not written one yourself.
https://appraisersblogs.com/appraisal-management-companies-exploit-borrowers-government-indulged-middlemen-are-wrong-rx-for-battered-borrowers/#comment-43080
There is like 400 something letters now. Hundreds of them appear to be some pre written form letter from the title industry.