21st June 2011

Appraisal Management Companies ‘might’ feel the wrath 07/21/11

posted in Dodd-Frank C&R Topics |

April 1st came and went with no good news regarding Customary and Reasonable fees and what the AMCs are doing to the appraisal industry in whole. I believe it was little more than a coincidence that it was also April Fools Day.

May 21st came and went without the world coming to an end. I also find this a little more than a coincidence that the Consumer Finance Protection Bureau will be taking over rule-making and enforcement in regards to Dodd-Frank Customary and Reasonable fee provisions.

Either way I am excited!

I know a lot of the Appraiser Coalitions as well as the AGA will be contacting them immediately, if they have not already set up meetings and sessions regarding the AMCs role in destroying an entire profession.

The Dodd-Frank provision requires that appraisers be paid a “customary and reasonable fees” and new federal interim guidance concerning lender compliance with the new rules.

The appraiser fee and independence provisions contained in Dodd-Frank were designed to address concerns that lenders were using less expensive appraisal management companies (“AMCs”) hired or owned by lenders at the expense of independent, high-quality appraisals. As a result, AMCs may be a regulatory target of the CFPB after the Bureau’s July 21, 2011 transfer date.

The Bureau will assume rule-making and enforcement authority for Dodd Frank’s appraisal fee provisions after July 21st. Notably, the CFPB will be enforcing Dodd-Frank’s penalties for lenders violating appraiser independence standards which are currently $10,000 a day for the first violation and $20,000 a day for each additional violation.

I hope we see some rule-making in terms of customary and reasonable fees, but I have a feeling it is going to be many years until there is a positive outcome if this is the only steps we take.

Please get involved with your local coalitions and find out what they are doing to improve our appraisal industry.

You can find a list of Appraiser Coalitions on my Website.

Take care!

Bryan Knowlton
http://www.appraiserincome.com

There are currently 10 responses to “Appraisal Management Companies ‘might’ feel the wrath 07/21/11”

Why not let us know what you think by adding your own comment! Your opinion is as valid as anyone elses, so come on... let us know what you think.

  1. 1 /*On June 22nd, 2011*/, Patrick Lawrence said:

    Appraising for 19 years, mostly rural, suburban and FHA.

  2. 2 /*On June 23rd, 2011*/, Bill McEvoy said:

    I hope you are right but “feel the wrath” sure does have that doomesday prophecy sound to it. I am largely hopeful that they (AMCs) find a way of doing business that adds value to the profession rather than takes it. Anyone reading this would do themselves and other appraisers well to answer the survey at my site http://www.candr.org and help balance the scales in the appraisers favor again.

  3. 3 /*On June 24th, 2011*/, Susan Kent said:

    Thanks for the link to the survey; I’m sure that we are all frustrated with the current situation and eager to do anything that will provide REASONABLE fees. Customary seems to be changing to a lower fee every week, but reasonable is also part of the equation.

  4. 4 /*On June 27th, 2011*/, o valero said:

    Customary and Reasonable fees?.?.?.?.?.?… More “feel good, do nothing” legislation.. AMCs have taken this oportunity to readjust their fees (lower) and call them “Customary and Reasonable”..show me the “wrath”

  5. 5 /*On June 28th, 2011*/, Retired Appraiser said:

    Now accepting bets on whether anything will change on July 21, 2011 with regard to appraisal fees.
    I’m betting nothing changes. Any takers? Name your limit.

  6. 6 /*On June 28th, 2011*/, Retired Appraiser said:

    I would be reluctant of that survey mentioned above unless you absolutely know it’s intended use.

  7. 7 /*On June 28th, 2011*/, sandiegohelp said:

    Retired Appraiser,
    I run the website http://www.notcustomaryandreasonable.com as well as this website.

    The information that is being collected will be first stripped of all information regarding the appraiser names and emails and the data will be submitted to state and federal agencies as well as the AGA and CCAP to use to help fight low paying appraisal management companies.

    At this time you can only turn in banks that are paying low fees. I feel this is a huge loophole as the appraisal management companies are basing their fees on competition between appraisers who are willing to accept the lowest fees. Not what was customary and reasonable prior to HVCC. Many appraisal management companies have the same work, for example Citibank, but fees vary between $200 – $350.

    I urge all appraisers to submit their information. I will be contacting congressmen in each state as well as the appraiser coalitions to help with data collection and reporting.

    Don’t sit on the sidelines and watch as our industry continues to get destroyed. Step up and get involved.

    We all know how appraisers never worked together in the past, were very protective about their information and seldom got involved with helping each other out. We need to change this mentality. Lets work together to fix our profession.

    Bryan

  8. 8 /*On June 28th, 2011*/, Klara Lorinczi said:

    I would very much like to get involved but there’s nothing I can do except turn down low fee work, become homeless and declare bankruptcy. Or accept low fee work and do the best I can with the situation. I’m too old to go into another profession or go back to school. Many of us are between a rock and a hard place with the low fees. If the companies find out we’re fighting back, they will black list us. What can we do without losing all of our business?

  9. 9 /*On July 8th, 2011*/, Kathleen Denington said:

    Frustrated Appraiser seeking Justice!!! I am completely and Utterly Outraged with the Management companies taking complete advantage of the appraisers. They act like they are doing a hard job. They e-mail you a job, the appraiser completes the job, e-mails it back to the management company then in turn they send it off to the lender. And they take 1/2 the apprasier money. How can they justify this for 2 1/2 mintes of work…. To top it off good luck getting paid from them. Just to get paid I have to threaten to report them to the Attorney Generals Office aswell as the BBB to adventually get paid. Something needs to be done soon before there are no good apprasiers left on this planet.. It is a Disgrace what has happened to the appraisal industry…..

  10. 10 /*On July 21st, 2011*/, Retired Appraiser said:

    Kathleen

    Include the following note at the bottom of each invoice:

    “A FINANCE CHARGE OF 2% PER MONTH WILL BE ADDED TO ALL ACCOUNTS EXCEEDING 30 DAYS”

    Appraiser Loft has finally offered to pay me a $400 fee for an appraisal that I completed 2 years ago. They failed however to include 24 months worth of finance charges. They will receive a summons this month from the district court for the balance of the payment $192 (if I choose not to compound the interest).

    Make a few attempts to collect, keep records to show you made attempts, then let it slide for a year or two if you can go that long. Investing in the Bank Of AMCs could be the best investment you ever made.

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