States Back LREAB Against FTC

States Back LREAB Against FTC - FNMA Ends 1004MC - Stress Test Failed?

States Support Louisiana Real Estate Appraiser Board against the FTC

States (and appraisers) are very interested in the outcome of the LREAB vs FTC to protect their own sovereign actions.

On July 11, 2018, the states of Mississippi, Idaho, Iowa, Rhode Island, and Utah filed an amicus brief with the United States Court of Appeals for the Fifth Circuit supporting the Louisiana Real Estate Appraiser Board. See the entire brief here or below.

The outcome of this will impact each and every one of us. As we reported a few days ago, one lender, BB&T, has opted to step up and follow the Veterans Administration Fee Schedule. We are anticipating more lenders and amcs to follow as this case has the potential to be very ugly for many lenders and their agents, the appraisal management companies. Jail time could be in the future for some. Lenders who use appraisal management companies many even require the AMC to follow the Veterans Administration Fee Schedule.

Did Fannie and Freddie Fail the Stress Test? According to an article in American Banker, the two GSEs could need a $78 Billion dollar bail out in the event of an economic crisis. Well it does not seem an appropriate time to start relaxing safe and sound practices with waivers, hybrids and the elimination of the 1004MC. Do they care?

On Friday, Voice of Appraisal released a show about the changes in the IRS requirements for valuations of donated items including real estate. The IRS will only accept a value determined by an appraiser, just the opposite of the direction of other branches of the government. Maybe the IRS has a better understanding of what can go wrong. John Russell, Senior Director–Government Relations and Business Development for ASA, is the guest and talks about how the Treasury Department’s proposal is harmful to the economy. Phil and John discuss how appraisers can benefit from the Treasury being clueless.

It is important for each of us to share this podcast with all your agent contacts. This could keep them out of some legal trouble.

Fannie Mae Says No More 1004MC? While most appraisers see this as a good thing, many lenders and amcs are still going to require it. If by chance your client or amc does not require it, a complete and detailed market analysis is going to be expected. Charts, graphs, and a detailed discussion is going to be expected. This is an area where you could get yourself into a bit of trouble if you short the analysis; especially in a shifting market.


  1. Please forward samples of Hybrid Appraisal Products you come across to VaCAP. We want to analyze the various types and forward them to the VREAB to help with the committee’s recommendations on these products.
  2. Contract Analysis Spread Sheets are due by September 30th. Download the spreadsheet with samples here.


VaCAP Board
VaCAP Board

VaCAP Board

Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.

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5 Responses

  1. Avatar chris says:

    For all you really smart people (that have the time)….VA has the lowest foreclosure rate as compared to ALL others. Under the VA system, Appraisers have TRUE independence from ALL kinds of pressure. Fees are fair and based on regional Fees.

    You can lobby EVERYONE on this SUPER HUGE fact for a basis of SOLVING HUGE problems with the current system.

    • Baggins Baggins says:

      Rotational fair distribution? A fee all panel appraisers would readily accept? Direct assignment distribution? No upload or technology fees? Qualified individually licensed appraisers managing every level of the distribution and review process?

      By promoting those standard VA approaches, you’re going against all of the money making gimmicks FNMA, Freddie, HUD, and the appraisal management companies at large have endorsed.

      Join me in my quest that when referring to pay to upload assignment portals, and amc’s, we always refer to them as money making gimmicks.

    • Avatar don says:

      The VA is a full recourse loan, they can, will and do lien the borrower for default on the loan.

      FHA, Fannie, & Freddie, can’t file against the borrower. Individuals borrowers have different responsibilities which influences credit. Cal Vet financing doesn’t trust borrowers either. Cal Vet buys the RESIDENCE and contract sells to the veteran, couldn’t get a second against a cal vet loan.

  2. Baggins Baggins says:

    In the case of information based on fee schedules, studies, and surveys, such fee schedules, studies, or surveys, or the information derived therefrom, excludes compensation paid to fee appraisers for appraisals ordered by appraisal management companies, as defined in paragraph (f)(4)(iii) of this section.


    And specifically, here;

    • Baggins Baggins says:

      Louisiana: Amc’s must stop anti competitive practices.

      FTC: Louisiana is engaging in anti competitive practice, by trying to stop anti competitive practices.

      Logical fault.



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States Back LREAB Against FTC

by VaCAP Board time to read: 2 min