Reasonable and Customary Fees – Who to Call?
Who to Call?
Fellow appraisers, peers, coalition members and all who work as professional real estate appraisers, we ask for your help.
Federal Law known as the Dodd-Frank Act went into effect on April 1, 2011. It clearly states and intends that real estate appraisers be paid “Reasonable and Customary” fees for appraisals performed by state licensed and certified real estate appraisers.
Reasonable and customary, generally means what appraisers in a geographic area are generally paid based on a survey of such fees. The survey is supposed to be of fees paid by such entities as the Department of Veterans Affairs (VA) or by surveys completed by a variety of others, not including Appraisal Management Companies (AMC’s). Many surveys have been done by Alamode, The Buzz Forum, and others.
As soon as the federal law went into effect on April 1, 2011, major Appraisal Management Companies (AMCs) immediately came out with new fee schedules that LOWERED fees offered appraisers who do work for those AMCs and anyone else who wishes to do work for them.
Whether or not this is a violation of Federal Law is and will be decided by others, likely in court.
However, it at least appears to be a violation of the spirit of the law, and a slap in the face of appraisers, the Congress of The United States that passed the law, and The President of the United States that signed the law.
We call on you to make your concerns known to federal regulators by immediately contacting those regulators at:
https://helpwithmybank.gov/file-a-complaint/index-file-a-complaint.html
Call or email the Appraisal Subcommittee, http://www.asc.gov/, and it’s Executive Director, Jim Park at jim@asc.gov and perhaps your state board as well.
If you have a copy of any AMC’s fee schedule sent to you on or after April 1, 2011, as well as what others such as the VA consider to be reasonable and customary, please attach that as well when contacting such regulators.
We can do this.
Got this email from Leading Edge Appraisals
“Dear x,
Thank you for your interest in working for our appraisal company!
As you know we have not sent over any orders to you because our program was anticipating new governmental regulator changes made in the Financial Reform Bill to increase appraiser compensation. We waited for these changes to take effect in October of 2010, and then on April 1, 2011. While the bill is supposed to be effective on April 1, 2011 there are not any governmental enforcement agencies at this time to enforce the regulations, and interpretation of the law is still under heavy debate.
This is the reason that our partnership has been delayed. Leading Edge Appraisals is a licensed and insured appraisal company that has been working hard to make a mutually beneficial relationship with you. We worked very hard to interview and screen the best appraisers we could find, and you have been selected.
We were hoping that with these new regulations we would be able to create a mutually beneficial relationship allowing us to pay you $200-$300 per appraisal which is what we had agreed upon. While we greatly continue to hope and pray that the government will enforce “presumption 2”, we have to make decisions based on the current market, and therefore have developed an alternative plan. This new plan requires sacrifices on both of our behalves but also has great potential rewards.
Currently, we have clients that have a strong work load in your market area, but have to turndown a lot of work because they are paying less than what we previously stated. Therefore, what we are proposing, if you are interested, is to set you up at 67% of whatever appraisal fee we receive down to a total appraisal fee of $200 which would result in $134 worth of compensation to you, our appraiser. If you aren’t willing to do this in all of the counties you cover, maybe you would be willing to do it in your home county, as obviously you would be traveling less. Remember, this would just be the minimum fee that you would need to agree to accept.
Please understand that while we would love to pay you more, which is why we waited over 6 months for these regulations to be installed, we are forced to work in the boundaries of the current circumstances. Should the government enforce their regulations, your compensation will go up accordingly.
If you are still able to able to work with us given these new circumstances, please reply and let me know. If you want to narrow your coverage areas to be better able to work under these terms, please inform me of that as well. Our goal is to develop mutually beneficial relationships and increase your business revenues. We look forward to hearing from you and anticipate a great deal of success – together.
Sincerely….”
Appraisers need to stop accepting these ridiculously low fees. If we all stick to our fees, AMCs will have no choice but to pay R&C fees. Just say no to low fees!
I called my board. Was told to call ASC who referred me the Federal Reserve Board. This is a joke!
Thanks for the info 🙂