Cracking Down on Appraiser Licenses & Higher Fees
Now they’re saying your license has to be revoked!
The Federal Government is cracking down on appraiser licenses that were issued by the states where the applicant did not meet the “new” TAF requirements. Several states have this problem. Virginia is in that mix. About nine appraiser licenses were issued that the Federal Government is now saying have to be revoked. About half of these people have reached out to me. There is not a lot I can do or VACAP can do. But the state will be addressing this issue over the next couple of board meetings. So if you are among the 9 to be revoked, I would plan on attending the next board meeting on April 26th.
It has been almost a month since the VREAB adopted the Veterans Administration Fee schedule as the presumptive minimum Customary and Reasonable Fee. VaCAP has gotten feed back from many appraisers with great success in obtaining a customary and reasonable fee. We have also heard from some that have been greeted with resistance. Keep the stories coming. We want the information. Please know that all information sent to VaCAP is held in confidence. If we need to forward you story, for what ever reason, we will ask your permission first.
Below is the information we sent out last month announcing the Veterans Administration Fee Schedule adoption. Please continue to use it to advocate for customary and reasonable fees. Every appraiser, AMC or Appraisal company licensed by the Department of Professional Occupation Regulations should be signed up with the Townhall and can access the Guidance Document issued by DPOR.
If you get resistance from an AMC for a customary and reasonable fee…
– Send them the guidance document (embedded below).
If the appraisal assignment is reassigned after asking for a customary and reasonable fee…
– File a complaint of non-compliance with DPOR
By Alex Uminski, VaCAP Treasurer
Virginia Real Estate Appraiser Board Guidance Document Customary & Reasonable Compensation for Fee Appraisers
- VaCAP Supports Shane Lanham’s Legal Fight - September 10, 2024
- It’s Just Responsible Journalism! - February 21, 2024
- Limitations for Damages Against Appraisers - January 9, 2024
I’m in Virginia and the other day an AMC I hadn’t received any work from since 2012 because they thought my fees were high, called and wanted to know if I could do one for them within a week. Even though I’m pretty swamped, I accepted. I wanted to test VACAP “Ask and you shall receive” theory. Within minutes I received the order for $325. I accepted the order, and asked them to increase the fee to $450. I also added that Virginia had passed the $450 presumptive minimum C&R fee in February. Within minutes the fee was increased to $450.
Thanks VACAP! I can attest to the accuracy of your theory!
I have several questions abut how things are going to work out in the state of VA. Is the goal to get a minimum fee of $450 on every order? Is the goal to say yes to the fee of $325 and later bring to light the below market fees and punish the AMC? Via massive lawsuits is the goal to chase out of state all AMC’s? Are appraisers negotiating fees based on scope of work requirements that are above VA loan standards? What is the going rate for that 4th mandated closed sale upfront, the 2 active and or pending listings, the cost approach? When AMC’s ask for side pictures, multiple street pictures, and other pictures that aren’t required, are appraisers asking for higher fees? Have any AMC’s eliminated/consolidated their 10 to 15 page engagement letters to simply reflect they want a USPAP/VA standard report? Have in fact all due dates been moved back to allow for a 10 day deliver as per VA standards? If so, are rush fees being paid on all orders with due dates of less than 10 days? Have AMC’s in mass brought to light the pay issues and voluntary raised fees? Can they raise fees without the appraisers consent? Can the appraiser file a claim if in fact the AMC can’t raise fees on there own? With in essence a level playing field (all AMC’s pay a minimum of $450), have AMC’s changed their marketing tactic to attract new appraisers? Are they activity recruiting reflecting benefits to the appraiser versus the typical tactic that often reflects benefits to the lender? I have many questions?
Hi bill,
I don’t think I can answer all your questions. This one particular order had one paragraph of requirements…just the regular stuff, 3 comps within 6 months, explain older comps, explain distance, interior photos, explain large adjustments… all the things that I normally explain.
I did accept the order to see if they would raise the fee. I saved a screenshot of the order along with my posted message asking for $450. If they had declined the order, I would have filed a complaint.
JC. A 1 week rush order from a 1 off unreliable amc company whom promotes low fees up front? That’s $650 dude. $450 is the friendly fee, for companies whom play fair and have played fair, even in the absence of government intervention. Everyone else gets their just deserts. If they’re only paying fair because they’re made to, they get up charged for being so dang unreliable in the first place. If they’re not happy, they can move down the line and go fish. The mere fact they sent the order at such an insulting low fee in the first place, equals an immediate up charge. Action, reaction. If they want to save the borrowers a dollar, there are plenty of fees that can get cut down. But never, never should that burden to save the borrower a dollar, fall on the appraiser. The borrower is not our customer, and we never agreed to provide them any discounts.
Hi Baggins, trust me I would have charged more if it wasn’t around the corner. This is a cookie cutter. I did a similar townhouse in the same subdivision last week. So there will be a lot of cloning. I do maybe 10 amc appraisals a year.
I took this one to see if they would raise their fees since they stopped using me because I charged more than the other appraisers on their panel. I doubt I would do any more work for them in the future. And agree with all of your points above.
As it relates to fees Baggins they are very local specific and the assumption that $325 is LOW for HIS area, may not be correct. By indicating that he had not received work in some time because of his HIGH fees (I guess his quote is $450), then by default the area may typically pay $325. There are plenty of AMC’s that want to pay $200 (imortgage/Flagstar in LA $10,000 fine / FHA 1004) and several large big box AMC’s that want to pay $250 in my area. The question to JC as I see it, if the state of Virginia has adapted VA standards (report due in 10 days), then could he have asked for a rush fee (due in a week)? Can he or someone else file a claim against the AMC for not paying a rush fee? If I was an AMC operating in the state of VA, then I would seriously be starting from scratch in how my engagement letters read. If they have 5 to 15 pages of specific guidelines to follow (assuming above VA standards), then I think the lawsuits would be very easy to file and even easier to win. The AMC’s should simply state the following, fee $450, due in 10 days, must meet USPAP and VA standards. The end.
bill, I agree. To tell you the truth, I didn’t think they’d agree to the fee increase and was hoping they wouldn’t so I could file a complaint.
Except for the fee issue, they used to be easy to work with. Like I said, one paragraph of requirements, no scope creep, no constant status update, etc. My fee was $450 then. They paid until they found lower fee appraisers. They asked me to take a cut. I said hell no and that was the end of our very new relationship. It ended soon after it started. I think I did a dozen appraisals for them.
I didn’t expect an answer for each question as time will tell how things shake out, but here’s a theory. If typical civil use and now AMC assignments pay at the same rate, and have very similar scope of work requirements, will you or other appraisers get back into doing AMC work? Assuming the pay is constant ($450) will we the appraisers in part filter out those more difficult AMC clients (we have MORE power to choose not to work for them)? Will AMC’s understand they must market to us (pay faster, reduce unnecessary revisions, etc.) to maintain their current appraisers and attract new ones versus just marketing to their client the lender?
Please keep us up to date on the specifics of these cases. Also, is there any way that I can find out about the specifics of these cases?
The reason I am interested is that I am aware the way licensing issues are handled as they pertain to AQB guidelines and their implementation at the state level. The latest round of changes (2015) involved a hard deadline with years of advance notice. If everything was not in place prior to January 1, 2015, then the appraiser is simply out of luck; no exceptions. It would be highly irregular that a licensee that met the requirements and was approved by 12/31/2014 would subsequently have their license revoked for not meeting the requirements. Something else is likely at play.
Alex, if I were one of these nine appraisers I would NOT WAIT ‘months’ to just sit back and see what happens. At the American Guild of Appraisers we believe in being proactive. I don’t accept that there is little we can do right now, unless I have contacted every agency involved, and then exhausted all recourse. Id start with asking which SPECIFIC requirements other than “new ones” are they alleged to have not met?
IF it is the degree, then Id seek to have revocation held in abeyance until the appraisers could complete the ALTERNATIVE 30 hours education. This is not the first state to be in this position.
Of course we only do THAT for members.
The key point when arguing appraisers fees, must revolve around the borrowing consumers fee. If the borrowing consumer fee is on average, uniform in the national sense, that would put any and all instances of excessive or disproportionate fee skimming, as being a clear violation of C&R fee rules. The whole C&R is the appraiser market thing is incorrect. Lenders continue to set the C&R in essence, via their up front consumer charge for appraisal services. Those typical up front consumer charges are usually 550+ these days. As a borrowing consumer, it’s nearly impossible to get an up front appraisal origination charge of less than 450 anywhere, and your much more likely to be told 650+, more often than not. I don’t care where you are, or how many appraisers you are in competition with. If the same lender charges the same amount, but pays one appraiser less and the other appraiser more, that is a clear instance of unearned fee raking. This idea to structure appraisal fees around civil service limits is nice in theory, but the solutions are much more simple than that. Distinctly different services should require distinctly separated billing structures. If the cost savings from reduced cost appraisal services are not returned to the consumer, that is an instance of junk fee, unearned fee, as well as the appraiser providing unethical incentive to be the preferred selectee.
The practical solutions from the appraisers shoes which are ethical and acceptable are limited, and simple. Cost + billing, or true rotational assignment. In any assignment system where the appraiser has the ability to compete on terms of fee which the surplus of fee remainder is kept by the order distributor, that is an unethical assignment system. Some solutions proposed included; racking C&R from HUD1 total appraisal fee disclosure notes (A nice push back to the cfpb’s reluctance or incompetence, in properly updating the HUD1 to reflect separate line items for appraiser vs appraisal management or clerk management fees.), and also a cost + system, where if the appraiser were to gain preference as the preferred selectee, the excess in savings would be returned to the borrowing consumer. Thereby eliminating a financial incentive to select the appraiser by fee, instead of by merit.
Many appraisers whom complain about excessive fee rakes, seem to be ignorant of the fact there are dozens if not a hundred or more amc’s and direct distributors out there, whom use fixed cost plus raking, and never take more than a hundred dollars per order. Some only take 50 per order. If they can survive and thrive under those numbers, and pay me the 450 minimums I demand, why can’t the rest of them. The answer is simple; Greed. By positioning yourself with the right companies, by way of asking the right questions, appraisers can effectively insulate themselves from corrupt management practices.
Leave the fee pressure distributors for the know nothing appraisers whom can’t seem to learn simple lessons regarding the principals of substitution. If a turkey is going to be cooked, it will be me tossing it in the friar. “You’re Fired”. Learn it. Live it. Love it. It’s musical chairs, and because the non licensed amc staff turn over rate is rather high, they’ll ring back eventually, they always do.
I’m fine working with amc’s, and I up charge them one to two hundred more than direct, for the added bureaucracy and work effort required. When they play the bidding game, I just make short work of that, don’t waste my time chasing ghosts, and knock out 600+ 2wks+ quotes, every dang day of the week. “Go fish”. More marketing exposure equals more income. As the amc prioritizes their lender client relationships far above the appraisers, they will pay when necessary. Since they refuse to be loyal to appraisers from the start, appraisers should have no reservations about playing the same substitutable game right back at them. It’s not rocket science.