To sum it up in a nutshell: “It’s legal if banks say it’s legal”.

Banks say it’s legal.

How does that rub ya? LOL

To whom it may concern:
Any revision to, or replacement of the follow criteria stated clearly in Dodd-Frank, a federal law, would require Congressional Amendment – not arbitrary gross misinterpretation of the actual LAW: Dodd-Frank ‘‘(i) CUSTOMARY AND REASONABLE FEE “Fee studies shall EXCLUDE assignments ordered by known appraisal management companies.” Kindly advise when the fictional “Option 1” now in the published Interim Final Rule will be removed. Thank you!

Predatory lending practices and subsequent preferential appraiser selection choices is an ongoing event which the implementation of HVCC, and related policies have not successfully managed. AMCs have walked right over the appropriate intention of their business position to quell predatory lending, & real estate valuation flipping & flopping, the same way they have walked right over C&R appraiser fee laws. Lack of round robin rotating fee panels allows for a multitude of advocacy related problems in real estate appraisal distribution.

What works is the tried and true traditional approach, similar to the VA panel, as well as many existing in house distribution rotating panel credit union methods. Having a biased middle man who seeks to appease the wishes of lending client commission based brokers is not much different than an appraiser being pressured directly by a biased lenders agent who utilized preferential assignment practices at the expense of fair consumer protection to maximize their profits. In fact, they are markedly similar.

The AMC will preferentially choose appraisers that show advocacy in favor of the lenders more often than not. Lack of rotating panels means one single appraiser can cause a systemic problem with valuation security and that can go on indefinitely because the AMC will not risk losing their lender clients any more than that one bad appraiser will risk losing his preferentially assigned appraisal work. Independent valuation opinions essentially cannot coexist within a climate of preferential appraisal assignment.

These are advocacy related issues which drive the entire structure of appraisal ethics. An appraiser must not be an advocate. However, feeding consumer appraisal charges back to the lender, their subsidiary AMCs, or even making deals work so an appraiser can keep up their automated AMC grading to receive more work, are points in fact which are at odds with proper ethical appraiser rules.

Is it too late for someone who knows how this works to examine this? The current implementation and interpretation of these rules is clearly erroneous. “The fox guarding the hen house” rings so true. The appraiser is many times the only person on the front end of loan to be a truly unbiased party, they are supposed to be uniquely qualified to assure the collateral worth is adequate. Preferential assignment practices have and will continue to cause these basic checks and balances involving appraisers, salesman, and brokers to be meaningless.

https://www.foxbusiness.com/features/are-you-paying-500-for-an-appraisal-that-costs-200