AGA to Discuss Appraiser Independence & C&R Fees
…excluded from Reasonable and Customary fee surveys…
The American Guild of Appraisers (AGA) / Guild 44 of the Office and Professional Employees International Union, AFL-CIO met with Representative Barney Frank (D-MA) on April 14 to discuss the Guild’s concerns with the Federal Reserve Board’s Interim Final Rule (Rule) regarding Appraiser Independence.
With the implementation of the Rule issued April 1, 2011, the Federal Reserve has introduced faulty regulation that implicitly fails to capture Congressional intent to reform the appraisal process and Appraiser Independence and the necessity to promote the use of market driven, Reasonable & Customary (R&C) fees for various valuation assignments. By injecting a skewed “safe harbor” under Presumption One in section 42(f), the Rule has unwittingly given license to appraisal management companies (AMCs) to use their own internal, non-market, fee schedules to disproportionately justify Reasonable and Customary fees directly in opposition to the Congressional mandate throughout the Mortgage Reform and Anti-Predatory Lending Act (MRAPLA) to have such fees excluded from Reasonable and Customary fee surveys.
Guild National President Peter Vidi requested that Rep. Frank write a letter to the Federal Reserve regarding the Rule, pointing out its significant deviation from the intent of MRAPLA.
“Congressional intent to restate the market survey for Customary and Reasonable Fees was not to include fees paid by appraisal management companies,”
said Vidi.
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I’ve left my comment on the matter here: http://appraisersblogs.com/amc/nar-realeases-statement-on-appraiser-independence/comment-page-1/#comment-100
In order to assure more consistent impartial security valuation, more eyes are needed, rather than less. Quit going with the lowest bidder who most consistently plays lenders advocate. That indeed is the by product of AMC insertion into the appraisal ordering process, and their order “performance” tracking methods which nearly all of them utilize because it’s built in to their uniformly accepted development software. It’s the same predatory lending methods, tied up in a new tidy AMC box. The difference is now the appraiser is powerless to argue any case of value variance from the lenders or other participating parties expectations. The process of demanding an appraiser reconsider their opinions to better align with the lenders value expectations is now quite literally an automated process with AMCs. Like I said, it’s built in to their software. Vendors who promote the lenders bottom line (advocacy), are AUTOMATICALLY positioned to receive more work in the future.