Is Georgia Going Rogue?
VaCAP has learned the Georgia Real Estate Appraisal Board is considering rescinding rule 539-1-.23. This rule is the customary and reasonable fee requirement to appraisers from appraisal management companies. The matter will be decided at a 9:30 AM Sunday July 17, 2022 meeting. From the Georgia Real Estate Commission and Appraisal Board:
RULE 539-1-.23 Appraisal Management Companies
Purpose: In light of the recent decision and order In the Matter of Louisiana Real Estate Appraisers Board Before the Federal Trade Commission of the United States and to avoid even the appearance of anticompetitive conduct or the unreasonable restraint of price competition for appraisal services in Georgia, the proposed rule amendments rescind RULE 539-1-.23 (i). The Board recognizes that the statutory authority for the rule remains as a foundation if future action is deemed necessary.
Main Features: The proposed rule amendments rescind all sections of the existing rule that address appraisal management companies paying “customary and reasonable fees” to appraisers.
VaCAP supports the payment of customary and reasonable fees to all appraisers. Many appraisers and appraisal organizations fought hard to insure our law makers were well informed about abuses from appraisal management companies. Our lawmakers agreed with us and 15 U.S. Code § 1639e – Appraisal independence requirements was adopted into Federal Law.
Every Appraiser needs to be aware of this and support our fellow appraisers in Georgia. If Georgia is successful in rescinding customary and reasonable fees, will your state be next? VaCAP asks that each of you to forward this to every contact you have, post it on social media and provide a public comment to the Georgia Real Estate Appraisal Board.
Written comments should be received by July 5, 2022 and addressed to:
Frank Lynn Dempsey
Georgia Real Estate Appraisers Board,
Suite 1000 International Tower,
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Proposed Notice of Intent:
- It’s Just Responsible Journalism! - February 21, 2024
- Limitations for Damages Against Appraisers - January 9, 2024
- AMC Engagement Letter: Appraisers Do Not Include Your Invoice - July 28, 2023
Sickening
We do not need fee fixing – we all are capable of quoting a fee for services and should NEVER feel bound by an offer of a fee from a client. ALL of our fees are on a case by case basis.
Um….. Not exactly. As borrowers are quoted appraisal fees ahead of time via TRID, appraisers should rest assured the lender has guaranteed that much of a fee to the appraiser at a minimum. Amc’s should not be able to step in and drive that appraisers fee down, then pocket the billable difference. There is a point where service is compromised by middle managements constant pressure to drive service fees down. This is a universal rule true in every industry. There is zero value added service from many appraisers perspective. As amc’s are staffed by non qualified persons, there is nothing they can review or suggest which is not already readily available to the appraiser from their own quality technical tools and license qualification training. Fee fixing is what the amc does, and they always fix the fee downward to increase their own profits. The exact amount is inconsequential, you can guarantee the amc has a financial motivation to pay less, not more. Because they do not bill for the amc service separately from the appraiser. The very accusation of fee fixing, that’s something an amc would say out of their own self interests. Appraisers are just trying to avoid going under because of the unfair order distribution policies amc’s have adopted, preferring the lowest appraisal fee above all other qualification factors.
Customary and Reasonable fee requirements are a matter defined and enforced by Federal law, not states. Report this to the SEC, as it carries a $10,000 fine for the first instance and $20,000 for subsequent: https://www.sec.gov/whistleblower
Section 129E(i) of TILA provides:
‘‘(1) IN GENERAL.—Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.
In the case of an appraisal involving a complex assignment, the customary and reasonable fee may reflect the increased time, difficulty, and scope of the work required for such an appraisal and include an amount over and above the customary and reasonable fee for non-complex assignments.”
Anyone else found “Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys.” Let’s get real!! Who operates in this world?
Third parties will not set our fees.
Um, third parties do not set the fees for your mentioned examples. VA is an example of government agency fee schedules, a survey of closing documents from a myriad of lenders where amc’s where not involved, aka real world costs from real world appraisers. That or BLM work yellow book independent contractors. Academic studies, same thing, an analysis of real world billable amounts performed by objective unbiased independent academics, aka disinterested parties from other business sectors. Independent private sector surveys, again, a survey or measurement of existing market data, and in no way ‘setting fees’.
This world is called an independent open and fair marketplace absent of amc middle management coercive fee fixing policies which harm the vast majority of all licensed appraisers. Come inside and get comfy, it’s warm and equitable in these halls where everyone is treated equally, they have independence, and are not subject to the pressures of corporations whom inject themselves mid stream into billing practices and then brag about record setting business growth to the same people they’ve directly harmed with their fee reduction policies. Third parties do set your fees if you’re an amc appraiser, because of their consistent financial motivation to profit by way of driving appraisers fees down. Where as studies are a mere reflection of open and fair competitive market fee quotes by actual independent appraisers, specifically examining the industry portions where such amc’s are not yet injected. Oh man, when lawn mowing literally pays better than 20 years of dedicated professional service… Yeah, amc’s all the way, for sure.
Can you imagine if ethical billing practices were applied to the amc industry? “Amc’s shall clearly and conspicuously bill for their services separately and apart from the appraisers service. This billable amount must be clearly stated to all parties involved including; the appraiser, the borrower, the lender, realty agency if present, title services, (etc etc).” Problem solved.
Have you heard of the blindfold mowing challenge? It’s a real thing. Appraisers would be naturally good at this. We’re constantly blindfold fee quoting to amc’s. No matter what we charge, cost savings are never ever under any circumstances returned to the borrowing consumer and with amc’s we are not allowed to know what the consumer was billed for our service. “What’s your fee and turn time?”
That was the law of the land Jesse L. Until the CFPB safe harbor interpretations.
https://www.consumerfinance.gov/rules-policy/regulations/1026/interp-42/#42-f-1-Interp
https://www.consumerfinance.gov/rules-policy/regulations/1026/42/#f
The amc industry has perpetuated the fraud with improperly co mingled billing practices. There is no practical way for anyone to discover via regular closing documents review, how the ‘appraisal services’ fee was divied up. No matter what the appraiser charges, the consumer bill remains the same. Thereby creating a financial incentive for amc’s to engage in anti competitive practices, ignore the most qualified appraisers for assignments, and give strict preference to the lowest priced appraiser, which then that lower fee appraisers billable amount functions as a bribe for the amc to prefer that appraiser among all others for the lions share of work assignments.
This is neither customary nor reasonable and absolutely does restrict our access to this space where amc’s manage what is estimated to be 80% of all mortgage origination appraisal request orders. As is evident in the FNMA CU database vs the AQB total lists of licensed appraisers, we have inferred that 3 out of 4 appraisers nationally refuse amc service. (Reasons the CU data is held under lock and key)
The argument is it is the amc’s whom are engaging in anti competitive practices and they’ve been doing so in a collusive effort which may pass the racketeering RICO statutes test for over 15 years now, some much longer. You can not find a single volume based amc in this country whom bills for their services separately, they in a coordinated fashion, all held to this same unethical billing strategy then hide behind TAVMA and REVVA when challenged.
And they’ve somehow got TAF in their back pocket probably on speed dial. Despite a decade and a half of requests, USPAP has never revisited the ‘management rule’ in a meaningful way as that pertains to appraiser billing and amc’s improperly co mingled billing practices. Appraisers provide the same exact service to amc’s as they do to lenders, but get paid half rate with amc’s. Dustin Harris made an entire business about how to teach appraisers to exploit this discount billing system and get ahead of their peers not based on qualifications but rather on fee alone. As consumer charges are typically equal between the two situations of no amc involved vs an amc involved, this anti competitive practice goes under the radar to those unfamiliar with appraisal industry billing practices.
MANAGEMENT RULE “An appraiser must disclose that he or she paid a fee or commission, or gave a thing of value in connection with the procurement of an assignment.” The appraisers billing discount is the thing of value to the amc, because of improperly co mingled billing. Otherwise under a separated billing scenario between the amc and the appraiser, if the appraiser discounted, those cost savings would go back to the consumer. And the amc would not have a financial incentive to choose the cheapest guy despite all the risk inherent with going with the absolutely lowest bidder. C&R is what the MAJORITY of panel appraisers would accept, but amc’s carve out a work around that can be claimed as compliant even if 99 out of 100 other appraisers would not take that low of a fee.
The power players in this industry refuse to acknowledge these clear as day factual points. The argument is complex to understand because the billing is convoluted obscured and held in many jurisdictions under a veil of secrecy so much so that oftentimes neither the lender the borrower or the appraiser know the fee breakdowns and what these other companies individually charged for the service, much less the borrowers appraisal fee, which should have been paid 100% to the appraiser (which was the industry standard when Dodd Frank Reg Z was written). It’s a logical fault how could this be compliant billing if we get the exact same volume at a much higher fee if avoiding amc’s, yet they fall back on the discount volume assignment arrangement clause even though that’s meaningless too.
42(f)(3) Alternative Presumption of Compliance
And that flies because nobody reviews this data after the fact. But it’s clear as day to appraisers. We literally deal with half rate billing when dealing with amc’s. “What’s your fee and turn time?” I have two full legal drawers of amc client files going back 14 years to prove that not a single one of them ever provided customary and reasonable fees which were anywhere near what lenders would pay.
The amc’s have a very clear motivation; select the lowest fee appraiser, pocket the difference between the consumers fee paid and the appraisers fee billed. This is violation of HUD unearned fee rule, and would be generally illegal fee padding behavior if the exact same activity was utilized by a licensed mortgage lender or any other number of ancillary supportive services within federally regulated mortgage lending. Demanding that nobody share their fee data with each other as they pocket the difference, that’s junk fee billing. Everyone in the mortgage lending pipeline gets their own separated line item disclosure, except amc’s and appraisers. Always include C&R arguments alongside a demand for separated billing disclosure.
The prescient of this carrying gravity and meaning is apparent and provable in states like CO where we have included language that if an order comes from an amc, the appraiser is required to state their billable amount and the amc can neither force appraisers to sign indemnity agreements or prohibit the appraisers disclosure of their fee within the report. Ask any appraiser in this country who’s been here 10 years or more, somewhere we all have memory or written copy of all these amc guidance points which clearly state we are not to state our fee to the borrowing consumer, as well as what is likely tens of not hundreds of thousands of random amc what is your fee and turn time email and phone call inquiry requests. The body of evidence is so insurmountable, because coordinated racketeering has been the very basis of the amc’s business model from the start. No single jurisdiction can comb through that many millions of pieces of evidence.
Please advise when the fictitious CFPB safe harbor rule on C&R billing will be rescinded.
And this. The Alamode fee survey. Which only came out once, in that precious window of time before the CFPB safe harbor rule was instituted, if memory serves correctly.
For those bureaucrats answering to the big lending and big amc industry consider this; The VA Veterans Affairs panel performs an HONEST survey to set their table fees. To this day, the VA panel is a dead center highly accurate truth which indicates what a customary and reasonable appraisal fee is. Every single instance of amc compensation to appraisers at a lessor amount is a fraud. VA actually looks at appraisers fees by only reviewing lending closing documents which DID NOT include an appraisal management company. Working RE tried to recreate the effort with a yearly voluntary fee survey but we suspect the data is not reliable as the amc’s could have entered fictitious ideas of what they thought low billing should be, and vice versa higher side for appraisers upset how the amc industry was dragging our fees down. C&R can not be determined by a single lender, if at any point in their origination or review services pipeline, an amc is engaged for any duties. VA spends months surveying the entire industry. And the cherry on top is the same lenders whom claim their FNMA appraisal fees are C&R when an amc is involved and the appraiser gets half rate, those same lenders turn around and issue VA loans and pay the appraiser double, yet consumer billing for the appraisers billable never actually changes. They’re all in on it, the purposeful outsourcing of appraisal management duties to third party companies. Then they turn around and claim appraiser scarcity when they themselves caused this scarcity by injecting unnecessary amc’s into the process which most appraisers refuse to work with.
Georgia could subpoena lenders records for lenders specifically whom do not use appraisal management services (there are a dozen major national lenders in every state whom do not use the amc model, but rather pay the complete appraisal services fee amount 100% to the appraiser.) There is a clear as day contrast and every single time with every single amc company, the aggregate billing amounts for amc’s result in lower compensation to appraisers. We’ve also learned this also often results in higher billing amounts to consumers in conjunction with lower appraiser compensation. It’s straight up greed, racketeering, and collusion industry wide. By removing the C&R compensation rule Georgia accomplishes nothing in terms of consumer protection or fair billing practices, but rather uses the weight of the state to affirm predatory business practices by amc’s and lenders dead set against independent appraisers. Georgia is merely one of many states which apparently thinks appraisers are sub human whom don’t deserve equivalent protection from predatory corporations. What’s new?
Lenders turn a blind eye because they save a lot of money by putting the full weight of funding outsourced third party appraisal distribution costs (amc’s), placing that directly on the appraisers back. Since when did the workers have to personally pay for the cost expenses with management and management was free to drive wages down as they see fit? We have employed our oppressor. When appraisers work with amc’s, appraisers become the amc’s customer. The amc’s entire income stream comes from the appraiser. Which is why the amc industry at large is now seeking to usurp the entire appraisal profession and is also colluding and coordinating with TAF and other groups to replace us entirely with avm’s and is currently developing an avm certification program. If the amc can finally eliminate the appraiser, they don’t just get a big piece of the valuation services pie, they can have the entire thing. It’s billions of dollars a year, 80,000 workers worth of full time income. And that’s just the remaining half, the other half is already fleeced out of this industry as the amc groups already rakes billions of dollars from our backs every single year. This is racketeering through and through.
Amc’s have restricted the GSE ML work for the majority of all appraisers. This is the anti competitive practice! These Georgia legislators sound like they don’t understand what they’re trying to regulate and legislate. It will pass, don’t get your hopes up. Big lenders whom prefer amc’s alongside their pocket amcs always get what they want. They probably wrote the proposed legislation because it interfered with their national models. FOIA on the legal writers and campaign contributions of those sponsoring this.
But not me, I give up. Lawn mowing is my future. All those rules about better report writing, competency, experience, ignored by almost the entirety of the mortgage lending industry. Only a handful of lenders and managers follow those rules. And you can’t find a single mortgage lender in America who’s completely independent, the mortgage brokers ALWAYS have an influence as to what appraisers are on the panel, always. The only way to correct this is to allow appraisers to market freely again to anyone and everyone. I’ve missed out on a hundred thousand or more worth of orders because when people refinanced or sold they were unable to request me specifically. I know because they’ve called me on the phone and I’ve explained it many times; thank you for trusting me but regrettably you have to use whatever appraiser they select and you’re not allowed to demand me even though you know I’m more competent and trustworthy than the appraisers they’re putting in front of you.
Such is the state of the appraisal valuation services industry today. The separation from loan production rule read really nice, as the mortgage lenders got away with widespread fraud and nobody went to jail. But in the end, this had a devastating effect on the valuation services industry. Amc’s swooped in with vulture capitalism at it’s finest and made billions. Appraisers have had a boot on their face ever since.
Dodd Frank Reg Z rules on C&R $10k/$20k daily recurring fine rules were meant specifically to force amc’s to bill separately for their service by using the financial penalty mechanism. That never happened. The far majority of appraisers whom spoke with legislators for Reg Z are either retired, deceased, or found entirely new careers. The day the CFPB C&R interpretive work around rule came out thousands of appraisers all threw in the towel at once.
I continue to search for this one weblink to find the C&R Federal Reserve letter writing request page, where we used to review the thousands and thousands of letters appraisers wrote on the matter. Anyone perhaps have that link? It was powerful to post, literally thousands of appraisers objection letters, the vast majority of them talking long trash about the devastating effect of the amc industry.
You new guys, we remain mystified why you’ve volunteered for the abuse of this industry. The very first answer to what is your fee and turn time must always be; what was the consumer charged because that is what my fee is. That’s how it used to work before amc’s showed up. C&R and fee surveys were there for lenders to determine what the majority of all appraisers on panel would accept, and that was the uniform fee all appraisers enjoyed on that panel. C&R is not what the lowest bidder will accept. Appraisers whom have taught you how to discount for orders and companies whom have enticed you to do that are not trust worthy.
You should not have to use outsourced services to compete in this industry. All you are supposed to need is qualification and good samples, competency, the ability to land on an exclusive limited lender panel. Then when you’re on panel, you should expect a fair share of the work orders. A quality honest lender never asks for your fee and turn time for standard routine orders, because they simply pay you the standard routine fee they quote the borrower for appraisal services. Amc’s ask for your individualized quote every single time. What is anti competitive practice? Hint, it has nothing to do with appraisers trying to take back the money amc’s pilfered directly from our pockets. Another 80,000 jobs are going to vanish into thin air soon if this does not turn around rather swiftly. Lenders will be in total control. Consumers will have no actual independent check and balance involved in the process. Amc’s will do whatever the lender asks of them, like is their current business model.
You can also write D. Scott Murphy, Chairperson of the Georgia Real Estate Appraisers Board. His office address is: 5400 Laurel Springs Pkwy STE 108, Suwanee, GA 30024; email at dsmurphy@dsmurphy.com
I emailed Lynn Dempsey the Chairman and one of the other members of the Board who I know and they both immediately responded and said they will make my concerns heard about this proposal. Please do you part and email DS Murphy and or Lynn Dempsey. I know Lynn he is a reasonable guy. Please see my post earlier here that discussed my concerns and what I outlined to the Board Members. Do it now. Vote is mid July. Thanks
Fine… but FIRST you should mandate that the Appraisal invoice is included in EVERY AMC report and include the fee paid to the Appriaser as page 1. Truth In Lending??
Are you guys talking about transparent solutions in good faith?
You said; ‘every AMC report’. I have identified the primary problem.
The solution to the predatory amc problem is exactly as written in the original Dodd Frank Reg Z text. If the amc company can not carve out separated billing, and sell that to the lender, they should be fined out of existence overnight. Appraisers should not be funding amc services, because it is the lender whom selects the use of this service, not the appraiser. Lenders should pay for the amc, and hands off the appraisal fee. As amc’s do not provide appraisals, they should not be sharing billing space with appraisers. Lenders can send orders directly to appraisers while maintaining separation rules, through a variety of tech systems with minimal effort and minimal cost. Amc’s charge hundreds of dollars for that ultra simple service and appraisers take that short. Half of all amc’s working efforts are devoted to shopping for cheaper appraisers, it’s an incredible waste of time and resources.
My state requires appraisers to list the fee in the report.
“Customary and Reasonable fee” has never meant anything in the first place and never has. Never got any pay raise because of Dodd Frank. Don’t like the fee don’t accept the assignment.
The anti-AMC sentiment is amazing; they are my best clients. All request for quotes or offers include a conditional offer based on my fee. Without fail I submit my fee, sometimes I get it and sometimes I don’t. In any event, when quote is accepted AMC’s pay in a timely way and they play an extraordinary positive role in reviewing appraisal work. My experience in reviewing appraisals done directly for lenders has shown me that generally, not always, appraisers describe the property as vanilla as possible using words like average with no specific description of detail. Further, I’m amazed how few appraisers say anything of any substance in the reconciliation section of the appraisal. PS. Dodd Frank doesn’t exist anymore Trump put them out of business.
I gave it my best foot forward for years, the experience was not positive. At one point I tracked the time spent answering quotes vs orders gained, I was spending 2-4 hours a day on just fee quoting. One in a dozen if not far less than that hit. I was quoting reasonable discount fees at $450 and often less. I’ve had amc people forget to upload counter offers, tell me just to hit the number, sub me out if I called finals, put obvious pressure on me, entice me to use their typing services, prescribe unreasonably low fee suggestions such as $200 per report alongside more enticement of more orders, a quite long list. Are you getting near to what the consumer was charged? With which amc? At one point I was approved down the line of the complete TAVMA list. I dropped amc’s in general around the time REVVA came out. I have an appraiser pal whom long since threw in the towel and because he knows the appraisal industry so well, has even had to file complaints against amc’s from his realty position. When I moved away from amc’s I immediately had much better time management, better working efficiency, more actual appraisal production, consistent fees, about 2x income stream comparatively per order completed. There was no turning back, it was obvious that fielding orders outside of the amc arena was the smarter business decision. What is amazing is how this certain segment of pro amc appraisers thrived ahead of the rest of us by cutting in line. I’m still open to amc’s, if only there was an amc whom billed for their services separately and did not have a consistent financial motivation to drive my fee down to increase their profit margin.
The anti-AMC sentiment is amazing; they are my best clients” Seriously?? Imagine if you will, a world where you are sent an order based upon your experience and geo-competency of the local market. Imagine that you are allowed to charge a fee based upon the amount of work it took to develop a competent report. Imagine you were not harrassed twice a day for EACH report for the status of what you are having for lunch that day and how long you plan to take to eat it. Imagine you were an electrician, plumber, attorney, hair dresser or any other “licensed professional” and weren’t required to share your fee and TIME with a “management company”. Imagine…. it is possible… but no likely I’m afraid.
Oh yeah, it’s all coming back to me now… The memories. My fondest memories involve talking about industry regulation only to learn nobody at the amc office even knew what the regulatory references were. “These are my new managers?” Managed by people not qualified to do the tasks themselves. Amc’s are instant out of the box telecom companies. No more. No less. My vote continues to be requiring an appraisers license for each and every single individual involved in any way what so ever with appraisal review, appraisal distribution, appraisal panel management, etc. Some companies do it better than others.
Do accountants and/or attorneys use management companies?
Heck my car mechanic ($135 per hour), plumber, electrician, etc. do not use management companies. All the preceding providers work on billable hours plus cost of materials – at a much higher real rate than good appraisers.
For some clients – I provide a detailed breakdown on the time component, car mileage, other expenses that it takes to complete the appraisal. It is amazing how often it is below minimum wage. Like other professions, lets change to the billable hours plus expenses for appraisal fees.
Do home inspectors use management companies?
Maybe the appraisal fee should not be predetermined at all for mortgage/lending purposes. How is it the appraisal profession became so manipulated and controlled by AMC’s and others; while other professionals have avoided this? This probably, in part, explains why such a large percentage of residential mortgage appraisals are dreadfully low quality.
The feeble attempt at reasonable appraisal fees is a joke. Only the corner cutters can capitalize on these. Way too often the real fee should be several times the “reasonable fee”.
It is amazing that – real estate is often the largest asset people have – yet you can pay more for an eyelash weave than for a thorough/good appraisal. Messed up priorities maybe?
I know Lynn Dempsey and have met him. He is actually a decent guy! I have emailed him about this and while writing this he has already responded by advising he will advise the Board of my “insightful input & comments”. ALL GEORGIA APPRAISERS OUT THERE LYNN’S EMAIL ADDRESS IS: ldempsey@grec.state.ga.us
Email him today and be respectful please! They are actually trying to help GA Appraisers, but this change is a mistake and not warranted.
The Bottom Line is Louisiana was FIXING fees for their Appraisers and that is what the issue was with the FTC. I told Lynn if they remove R & C verbiage in its entirety from the rule that will give AMC’s free license to reduce their fees to anything they want.
BUT here is the real issue which I also told Lynn to discuss in their July meeting… BLASTED orders. Now this is the real culprit. This is the one way the AMC’s get around paying R & C because the Appraiser places the bid. All that blasted orders do is PIT Appraisers against each other by having them place low ball offers to get that order. In this changing market with appraisal orders on the decline, the fees that some Appraisers are offering are crazy low. I believe firmly in you get what you pay for in this world. And all that these blasted orders are doing is producing sub par reports. This process of blasting undermines public trust in our end product. I don’t care who you are, if you are getting paid 1/2 your R & C fees, corners will be cut. If you feel otherwise I don’t believe you! Sorry! We need not cheapen our product by continually accepting unreasonable fees for the job we do not to mention the huge liability we are under these days!
I believe these low, below C&R, fees will work their way of the industry. If an appraiser will cut their fees then what else will they cut? Their time on producing quality, credible work? Even their ability and competence must be below par if they will take a fee below par. I’m not accepting orders that cut my fees. I’ll wait until these AMCs are gone.
Ever since the headlines came out “IS GEORGIA GOING ROGUE” regarding fees, EVERY AMC out there are cutting our fees. Of all things to influence our fees as we see every expense is practically doubling in price, it is our own GREAB. Who would’ve thought our own organization is doing the most harm to our industry. VA pays $600+ for every report. But I now am getting orders from AMCs $100 less than I was 2 months ago. I am NOT accepting orders that are decreasing fees. Are my expenses decreasing? NO. WHO is influencing GREAB to do this????? It all comes down to money. So who is influencing GREAB to do this??
It’s called the FTC and they are investigating the GA board. That is why this is being considered.
I wonder what about our GA law prompted this investigation. GA is not fixing prices like LA was trying to do.
UPDATE:
This morning I attended the GA state appraisal board hearing on the proposed rule to eliminate the C&R fee law they have in place, you know the one that is similar to the one in Dodd-Frank.
The Ga board apparently is being investigated by the FTC for their law. They thought that the FTC vs La case was a ruling in favor of the FTC when in fact it was not and wanted to avoid any sort of notion they were price fixing or anti trust.
The Board received letters from appraisers and some others in the 30 day time frame and yet here I was at the board meeting the ONLY appraiser to show up and speak up about it.
The board president made a simple statement to start which altered my initial comment. He stated the state board was here to protect the public and not the appraisers. They are here to license and regulate appraisers. Very true.
So I processed to get my opportunity to speak and made it clear that removing this law completely would do more damage to the public but appraisers as well and the state How so? Well if AMCs have no state rule as far as C&R goes they would resort back to pre Dodd Frank days and be able to pay whatever they wanted, even lesser than they do now which would most likely result in appraisers to stop working with AMCs and create that false narrative of a shortage. It would harm the public as there may be less appraisers for lender work, faster and cheaper appraisers doing less quality work to make up for the lack of good fees thus leaving the public with more garbage valuations. It would harm the public because now we would be back to the narrative that we need more AVMS, hybrids, desktops and cheaper valuations to make up for the lack of appraisers willing to work for Pennies on the dollar.
I stressed to them that they shouldn’t be bullied by the FTC, that they need to talk with other agencies, the LA attorneys to understand what went on in the case, and many others before making such a radical decision and seek alternatives. Maybe it’s a simple rewriting of it. Maybe there is nothing wrong with it period.
I spoke about many other things as well in my time allotted to me from bid requests, trainees, AMCs leaving appraisers unpaid, and how allowing AMCs to charge borrowers a certain amount and pay themselves more than the appraiser or seek out the cheapest is not protecting the public.
At the end, the board president stated that he was prepared to make a motion to adopt the rule change and drop the law, however after hearing me speak not only as a certified appraiser and president of the AGA, along with some letters sent, they unanimously voted to table the proposed rule change and seek further advise, information and do more research before proceeding any further.
While not a gigantic win, it’s a win none the less and I applaud those who took to time to write letters. I just wish more appraisers would have m to the meeting to speak up in person.
Shout out to Mary Thompson as apparently she wrote a great letter as well that was mentioned by the board members.
Hey Mark, So glad you were there I am so sorry I did not realize I could be at the meeting! You addressed every good thing that I also did in my letter. I know and have met Lynn Dempsey and so I wrote him and I also wrote Jeanmarie Holmes on the Board who I know and have met. Lynn was very appreciative of the letter and my concerns and did say he would relay them so I am glad he mentioned that. Did they discuss Bid orders from AMC’s? I told them both they are the bane of our existence and they should be BANNED in our State. All bidding does is force prices down and the order goes to the cheapest bidder. I get at least 3-4 bid offers a day which I DELETE! I even sent Lynn a copy of one of these posts here about AMC’s and what Appraisers across the Country think of them! A real eye opener for them.
This is a huge win for now. I advised Lynn they can change the wording but just make sure that it says that prices can be negotiated but they have to pay AT LEAST our R & C fees and then they can pay Appraisers from that starting point upward based upon complexity, etc. As you noted they were all concerned about LA case and that case was different as LA was trying to FIX fees for Appraisers. GA was not doing any such thing. All they were doing was helping us by letting AMC’s know they have to pay R & C.
Thank you very much Mark for going and solidifying their decision at least for now. I will write Lynn and make sure that if they talk about this again I want to know when.
Did they say when they would be bringing this back up again?
You are the best!
Yeah. They were ready to adopt it but I think your letter and me talking really helped. I know Lynn as well as Craig and Scott. So it worked out well for now.
No time frame. They said they will do exactly as suggested and gather more info, do more research and talk to other agencies and people.
Awesome!
As I said. “Customary and Reasonable fee” has never meant anything in the first place and never has. Never got any pay raise because of Dodd Frank and the AMCs still pay what ever they want. I’ve been getting order offers for $300 for a full 1004. Since when in the last 15 years has this fee been “Customary and Reasonable ”? Law or no law, what’s the diff?