11th January 2012

ASA, NAIFA, AI, ASFMRA File Comments with Federal Reserve on Appraiser Independence; Seek Critical Change Regarding Customary and Reasonable Fees

posted in Dodd-Frank C&R Topics |

On December 27, the American Society of Appraisers, together with the National Association of Independent Fee Appraisers (NAIFA), the Appraisal Institute (AI) and the American Society of Farm Managers and Rural Appraisers (ASFMRA), filed reply comments with the Federal Reserve regarding its proposed Appraiser Independence Interim Final Regulations. Of utmost importance to ASA and our partners was concern over the potential for “the consideration of fees paid by AMCs when adhering to the first presumption of compliance with the customary and reasonable fee regulations,” which uses a series of factors in determining whether the fee paid to an appraiser is appropriate under the law and regulations. This concern arose from commentary provided by the Fed in its Interim Rule which stated that determining whether an appraisal fee is customary and reasonable, “does not require that a creditor use third-party information that excludes appraisals ordered by AMCs.”

Also addressed in the letter was the appropriateness of safe harbors for reliance upon third-party fee studies and surveys which rely on generally accepted survey methodologies, and a recommendation that the Fed, using its RESPA authority, require separate disclosure of appraisal fees and AMC fees in this or a subsequent rulemaking as a matter of consumer protection and to further ensure that appraisers receive customary and reasonable fees. The letter also directly addresses over a dozen questions raised by the Fed as part of the rulemaking process on a variety of issues, from the extension of conflicts of interest prohibitions to AVMs, to outcome-based appraiser compensation, to the consideration of professional designations as part of a determination of the reasonableness of fees.

http://www.appraisersnewsroom.org/?p=476

There are currently 3 responses to “ASA, NAIFA, AI, ASFMRA File Comments with Federal Reserve on Appraiser Independence; Seek Critical Change Regarding Customary and Reasonable Fees”

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  1. 1 /*On January 12th, 2012*/, carol said:

    I am so glad to see this article. I have been relegated to working for sometimes less than .50 cents on the dollar for the past several years due to the onslaught of AMC’s taking over the appraisal profession. I was a single mom back in the late 1980’s and I worked as an office manager in an appraisal shop for 7 years throughout the 1990’s while going back to night school to better myself and show my children that you could attain the American dream with determination through hard work. I received my BA in business in 2001, and then went through the trainee process and then ultimately became an FHA Certified RA – all this over 17 years of long hours and hard work. Sadly,to find that the profession which I loved and was so proud to be a part of had been hijacked by the lack of careful consideration by our “lawmakers” and the greed of the AMC’s who have somehow attaned the corporate power to influence the appraisal process. I know of no profession where the theft of more than half of ones professional income is acceptable, but should be treated rather as criminal. I am barely making it these days, so I am relieved to see that some progress is being made to restore this profession to the respect it deserves.

  2. 2 /*On January 12th, 2012*/, Joe Batrich said:

    Twice, I have been stiffed by AMC’s who refuse to pay for a commercial appraisal due to unfulfilled requests. Twice, I was asked to provide information that was unavailable as I clearly stated to the reviewer, however, rather than pay for the time I had invested in compiling the report, I just got stiffed. The AMC’s and banks have the right to refuse payment for any reason, read the fine print in your contractural agreement. The AMC’s and regulatory agencies have to realize that the AMC’s are using geographically incompetent reviewers to review our reports. Had the two AMC’s used local reviewers instead of someone located in another state, they would have realized the information requested was not avaialable, instead, I wasted 4 weeks of my time and lost over $5,000 in revenue. The reforms MUST include a local review of the appraisal, by a local appraiser, not someone located halfway across the country.
    AMC fees have not changed, field reviews are “offered” at less than half the normal fee and take twice as long as a conventional appraisal, Bids from other appraisers are being accepted at far below normal fees. Until we stand together as a united group, appraisers will continue to get walked on by banks, AMC’s, and lawyers.
    There are so many shortcomings in the appraisal industry that need repair. Set fees are not the answer, but raising the floor is a start. Sorry but $300 for an appraisal is an unacceptible fee for an appraisal, and I have seen very few residential appraisals above $300 for “bid”, personally, I pass, but someone is doing them for far less than what we were in the 1980’s. Some changes need to be made now!

  3. 3 /*On January 23rd, 2012*/, Retired Appraiser said:

    This article offers false hope to any appraiser who read it. Don’t be surprised when nothing changes with regard to fair fees (much like on April 1, 2011). Your beloved profession has been successfully hijacked friends and there is nothing that you can do about it. The banks pulled it off in 2009 and the U.S. government was more than willing to assist.

    Need more info on just how the game was played? Read James Manning’s book “Public Trust Betrayed”. Also watch for the documentary that is being produced on the subject. It should be an enlightening slap in the face of the typical homeowners who continue to live in blissful ignorance of what happened.

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